Joint Life Annuity

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A  Joint life annuity provides an income stream as long as at least one of the annuitants is alive.

When the final annuitant dies, the contract ends and any contractual cash refund or remaining guaranteed future payments are paid out to the named beneficiaries based on the original terms outlined in the the annuity contract.

Joint life annuities payout lower income streams than single life annuities because the insurance company is accepting income longevity risk for two people.

Joint life annuities can be purchased with either registered or non-registered funds. 

The income streams of Joint life annuities purchased with Registered Funds are 100% taxable.

The income stream of Joint life annuities purchased with non-registered funds will have a blend of taxable interest income and tax exempt return of capital.

When you purchase a Joint life annuity with non-registered funds you will be asked to choose between a tax advantaged prescribed annuity or non-prescribed annuity  where interest is taxed as earned.

You will also be asked to choose from a level or non-reducing payment and a reducing payment.  A reducing payment reduces by a pre-determined percentage after the first annuitant passes away in the same way that a Defined Benefit Pension payment reduces for the surviving spouse.rest is taxed as earned .

• Your surviving spouse (if they are joint annuitant and joint owner with you) will continue to receive a monthly income for the rest of their life as outlined in the annuity contract.

• A new passive income source.  Use the guaranteed monthly income payment to fund your retirement lifestyle or fund a major expense like a mortgage or assisted living expenses.

• Your joint life annuity payments will continue for the lives of both annuitants and never decrease because of fluctuations in interest rates or the stock market.

• Your joint life annuity payments provide stability to your monthly cashflow and enhance your income security, which gives you the confidence to splurge from time to time, instead of denying yourself because you are worried about interest rates or the stock market.
  
• The guaranteed income payments from single life annuities positively affect your ability to qualify for credit with favorable terms should this be needed.

• With a joint life annuity, you can create your Custom Couples Pension Plan with an income bridge for early retirement.

• Joint life annuities simplify your financial life because all the hard work and decisions take place at the time of purchase.  This means that there are no complicated investment decisions to make in the future.

• If you are one of the two the annuitants and also joint owner of a joint life annuity, you will never outlive your money.  We define this benefit as having Income Security.

• Upon the final surviving annuitant’s passing, the contract ends and any contractual cash refund or remaining guaranteed future payments are paid out to the named beneficiaries based on the original terms outlined in the annuity contract.

• No MER’s (Management Expense Ratio), ongoing fees or additional cost.

Your decision to purchase an annuity is one in which you are betting that you and your spouse (the annuitants) are going to enjoy a long and rewarding retirement.  When you buy a joint life annuity, you are hoping to receive guaranteed income payments that will exceed your original deposit.

Did you know that in Canada a single 65-year-old has about a 22 percent chance of reaching age 90, while a  similarly aged couple has a 47 percent  probability at least one spouse will reach the age 90 milestone and a 20 percent probability that one will live past age 95? 

When you buy a joint life annuity, you are hoping to receive guaranteed income payments that will exceed your original deposit.

The insurance company has a different motivation.  The insurance company is betting that they can take the lump sum that you have deposited into the annuity contract and invest it in their business operations and investment portfolio and earn much more on that lump sum than they will have to payout to you over your lifetime as the interest portion of your annuity payment. They are making a different bet and you are providing the capital they will use to fund it.

Annuitant based factors:

• Both annuitant’s age in years and months.  The older you are, the higher your payment. (This is why your exact date of birth is needed to obtain your quotes.)

• Both annuitant’s gender assigned at birth. (Because this influences life expectancy.)

• The early death estate value guarantee that is selected.  
  (The higher the proportion of your initial deposit you want to guarantee, the lower your payout rate will be.)

• Additional features such as indexing or inflation protection, income deferral (up to 10years is possible), the purchase date and the income start date.

Some of the factors the Life Insurance Company takes into consideration when determing their payout include:

• The insurance company’s current capital needs to meet business objectives and fund their operations.

• The insurance company’s mortality experience and expense.

• The insurance company’s short- and medium-term plans for expansion or mergers & acquisition.

• The current long-term interest rate for bonds. (Long-term bonds have maturities of 10-years or more.)

• The economic outlook and opportunities on the horizon.

Joint life annuities are primarily purchased by retired couples who want to establish additional guaranteed monthly income that will continue for as long as either spouse is alive.

Sometimes, joint life annuities are purchased by grandparents to facillitate a multi-generation lifetime income gift.

The retirees decide how much capital they want to commit to their annuity.

The insurance company calculates the monthly annuity income payment they are willing to pay the Annuity owner based on the initial deposit amount, the age, gender, and terms of the early death estate value guarantees and provides a quote.  

Annuity payout rates fluctuate daily and may vary quite a bit from insurance company to insurance company.  This is because each insurance company has different business objectives and capital needs that drive what they are willing to payout to win your business.

Next, your independent Qualified Annuity Expert will “price check” the current annuity payment environment by conducting a market survey. This is a special report outlining what all insurance companies in the Annuity market are willing to pay you given your preferred terms and summarize it in a Market Summary Report.

Once the report is ready, you  will meet with your independent Qualified Annuity Expert, who will walk you through all your options and share any additional information that is relevant to your situation like the best times of the year to purchase your Annuity and how to lock in your rate, so you won’t be disappointed once the wheels are in motion.

Once your Annuity is issued, you will receive your first monthly payment according to the termsof the contract. 

These payments will continue as scheduled, every month until the final surviving annuitant dies.  The annuitants are the people whose lives the payment depends upon and does not necessarioly have to be the annuity owner.  However most joint life annuity contracts have the same joint owners and joint annuitants.

Upon the final surviving annuitant’s death, the payments will stop, and your beneficiaries would receive their benefit in a lump sum as outlined in the estate value guarantee provisions of your original annuity contract.  

It is important to point out that in situations where the early death estate value guarantee has been fully paid out prior to the death of the annuitant, there will nothing left to payout to the beneficiaries.   

Your Qualified Annuity Expert will explain how this would work and at what age this would come into effect based on your situation and will put it in writing.

We help take the mystery out of Canadian retirement income annuities by answering some of the most commonly asked questions in a simple, educational personalized way. 

Our Qualified Annuity Experts will provide you with objective annuity advice and show you how including an annuity in your retirement income plan might help you achieve your life and legacy goals. 

Because they are fiduciaries, they  will be frank with you and tell you if an annuity isn’t a good idea given your circumstances and point you in the best direction so you will have a better outcome.

If this is the case they will advise you in writing as to why they aren’t suitable for your situation so that you won’t end up regretting your annuity decision later.

We offer a no cost, no obligation, no sales pitch, no pressure,  all questions answered 15 minute chat. 

If you are interested in learning more just click the button below to schedule your chat get your answers from one of our Qualified Annuity Experts.