The challenge to answering the question "Will annuities increase?" is that the answer depends on the context of the question. I will provide an answer for different situations and if you would like further clarification you can contact me.
In Canada, there are basically two type of annuities, immediate and deferred. Immediate annuities provide an income in exchange for a lump sum. With a deferred annuity, the income is in the future,
Deferred annuities are often used as an accumulation or investment vehicle. When the investment options are guaranteed, it is similar to a guaranteed investment certificate, GIC, and could increase through interest growth. In Canada, variable deferred annuities are often referred to as segregated funds or seg funds. These are similar to mutual funds and their value can increase or decrease depending on the fund(s) performance. Since they are issued by insurance companies, seg funds do offer minimum death and maturity guarantees, typically 75% or 100%. Some companies also offer resets or the locking in of gains, the full details of which are outlined in the plan's information folder.
One major factor in determining the income provided from immediate guaranteed annuities is long term interest rates. If rates increase, the amount of income provided will also increase. The income from an immediate annuity can also increase after issue depending on the terms of the contact. An indexed annuity for example can provide for an increase in income each year. Another option would have part of the income dependent on the performance of a fund or pool of funds, where the income would increase or decrease depending on the funds' performance.
This is a basic overview of a potentially complex subject. Do not take any action without consulting a licensed professional.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
.JPG){kind=avatar}
In Canada, there are basically two type of annuities, immediate and deferred. Immediate annuities provide an income in exchange for a lump sum. With a deferred annuity, the income is in the future,
Deferred annuities are often used as an accumulation or investment vehicle. When the investment options are guaranteed, it is similar to a guaranteed investment certificate, GIC, and could increase through interest growth. In Canada, variable deferred annuities are often referred to as segregated funds or seg funds. These are similar to mutual funds and their value can increase or decrease depending on the fund(s) performance. Since they are issued by insurance companies, seg funds do offer minimum death and maturity guarantees, typically 75% or 100%. Some companies also offer resets or the locking in of gains, the full details of which are outlined in the plan's information folder.
One major factor in determining the income provided from immediate guaranteed annuities is long term interest rates. If rates increase, the amount of income provided will also increase. The income from an immediate annuity can also increase after issue depending on the terms of the contact. An indexed annuity for example can provide for an increase in income each year. Another option would have part of the income dependent on the performance of a fund or pool of funds, where the income would increase or decrease depending on the funds' performance.
This is a basic overview of a potentially complex subject. Do not take any action without consulting a licensed professional.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.