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Why Your Banker and Investment Advisor
Never Talks About Annuities

The 7 Simple Possibilities Revealed


Anytime we talk about annuities with retirees we hear the same response over 80% of the time. "Why haven't I heard more about annuities before?"

Through some research and over 20 years in the financial services industry,
weíve broken it down to 7 possibilities:
  1. It may be the banks want you to leave your money with them.
  2. Maybe your banks investment advisor simply cannot offer them to you.
  3. The investment advisor is not licensed to sell annuities.
  4. Without media promotion, annuities have simply been kept in the dark.
  5. If you pick the wrong advisor, then you'll never hear a word about annuities.
  6. Maybe the financial advisors you're dealing with typically, don't know enough about them,
  7. Or won't tell you because they can't make a commission or enough of a commission on them. If they did make a commission then it's only a small one- time commission. Many advisors don't like to earn a small one-time commission on annuities. Most prefer to sell you mutual funds that pay ongoing trailer fees, even with the outrageous management expense ratio (MER) attached to them, not to mention the extra HST tax attached to the MER fee. Whether your mutual fund goes up or down you must pay the MER every year and your investment advisor keeps receiving his trailer commissions every year. The more money the investment company, bank, and your agent can accumulate form you, the higher commission they can receive. A good safety net for the bank, investment house, and their agents, but not the investor.
Ask yourself this question:

"Have I been receiving the kind of service I deserve from my bank
and my investment advisor?"

If you answered yes-thatís great, it should be that way. If you answered no, then try this little experiment. Try pulling your money out of these places and watch how quickly they contact you and finally start paying attention to you. I personally know many retirees or soon to be retirees who have never received a call form their bank for several years to advise them of market conditions that could affect their investment and retirement portfolios. Only until their bank receives a transfer form by a competitor to transfer their funds out to another financial institution, will they contact you. Itís an easy experiment send them a transfer form and they will call you. Then theyíll tell you to hang in there and wait for you funds to go back up. Or theyíll tell you to transfer your money into one of their "new funds" that should quickly get you the money back that you lost with them. They offer no other solution. What else can they say, when the goal is simply to have a lot of money in their accounts to keep up the hefty commission cheques.

Otherís would have you buy risky stocks to make a buy and sell commission every time you make a transaction. How many phone calls have you received lately from your stock broker telling you about a new stock with loads of potential? Only to find out later that your stock tanked. Your stock broker still makes his commission regardless.

The bottom line is if your investment advisor or banker cannot offer you insurance products to protect your investments and make a commission on them, then you wonít have an annuity as an option to supplement your guaranteed pension income.

Theyíll give you all sorts of reasons why annuities are a lousy investment, yet annuities have a long successful history dating back to Roman Times (the word annuity itself comes from the Latin word- year or annual.)

Annuities have been around so long because they work!


What is An Annuity?

Simply put, an annuity is a guaranteed and steady stream of income payments you receive in exchange for a lump sum of cash. Most annuities are purchased by retirees or soon to be retirees. They have a distinct tax advantage if purchased with non-registered money.

Annuities are a simple, guaranteed investment that has withstood the test of time. Today, annuities are increasing in popularity simply because they are very beneficial for investors, especially seniors, who need a guaranteed income they can never out-live!

Annuities are also among the safest investments around because they are financially backed by Canadaís insurance companies, which in turn are backed by an organization called Assuris (www.assuris.ca). Assuris is the not for profit organization that protects Canadian policyholders in the event that their member life insurance company should fail.

Assuris' has a monthly income protection for annuities. If your life insurance company fails, your payout annuity policy will be transferred to a solvent company. On transfer, Assuris guarantees that you will retain up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher. Assuris is funded by the life insurance industry and endorsed by the Canadian government.

Itís hard to imagine what drawbacks there would be for anyone who is retiring, who would not like to have guaranteed income for the rest of their life? A plan that will allow them to retire regardless of market conditions.


Are there any disadvantages to an annuity?

Sure, you are entering into a contract that is non-cancellable. You are basically giving up your capital for a guaranteed income stream. There is a possibility you end up choosing the wrong type of annuity with the wrong guarantees. An experienced and savvy annuity agent can help you here.


Should you put all your money in an annuity?

Of course not! But they are an excellent insurance vehicle useful in any retirement plan. They can help prevent depletion of your capital through sale of other assets.

Annuities should be a part of your overall investment strategy,
an excellent way to diversify your guaranteed income portfolio.

Donít put all your "eggs" in the GIC and Bond basket!


Ask yourself why you have not investigated annuity accounts before. Was it because of what you know, or think you know? If youíre unsure then it may be worth learning more about annuities. The banking and investment industry may be getting more media exposure but annuity owners in the last ten years have won the battle of asset preservation. They have protected their principal and have received above average returns with zero risk.


Types of Annuities

Single Life Annuity-A single life annuity will provide you with an income for as long as you live, ensuring that you will never outlive your money.

Joint and Last Survivor Life Annuity-This life annuity is payable while either you or your spouse/partner are living. When one spouse/partner dies, the survivor can continue receiving income payments as agreed upon when the annuity contract was established. As with the single life annuity, a guarantee period can be written into the contract.

Term Certain Annuity-This type of annuity can be useful for planning ahead when you require a specific or additional income for a pre-defined period. A term certain annuity provides you with an income for a set period, or until a certain age.


Annuity Options and Riders to choose form

Guaranteed Period
An annuity can be purchased with a guaranteed payout attached to them, ranging from 0-25 years. What that means is even if the person who bought the annuity dies, their beneficiary will continue to receive the payments throughout the guaranteed period. The longer the guarantee period you choose the lower the annuity payments will be.

Inflation protection
Annuities can be purchased to hedge against inflation. Some companies offer a percentage increase every year of 2% or more while others will offer an annuity attached to the Consumer Price Index (CPI). This protects your income from inflation. The higher the percentage you choose the lower the payout.


Is An Annuity Right For Me?
How Does This Product Fit My Needs And Objectives?


In your working years you try to maximize your income. When you finally retire you want to preserve your savings and try to make it last the rest of your life. An annuity converts your retirement savings to a pension. Then it becomes easier for retirees to adjust to retirement since they know that their annuity income will cover their expenses. Take a good look at your personal situation and try to answer these questions.

Q. What are my living expenses during retirement?
You want to cover all your living expenses with a guaranteed income you cannot outlive. Identify all your sources of income including your Old Age Security (OAS) and Canada Pension Plans (CPP). Jot down all your expenses and see how much you need to spend. Then just top up your guaranteed income with guaranteed annuity.

Q. I donít have a retirement pension from work. Should I use an annuity to build my own pension plan?
There are many retirees out there that do not have the benefit of a company pension plan. Take a look at your assets be it capital or liquid and determine if these assets can be converted into a monthly pension plan using a life annuity. If you are concerned about not being able to pass on your asset to your loved ones if you liquidate for the annuity, not a problem, buy a life insurance policy (if you qualify) to replace that asset. Build your pension plan with your savings.

Q. How much risk am I willing to take to receive a higher pension amount?
Know your "risk tolerance". If the stock market takes another crash, are you willing to wait for a correction? More importantly, can you wait for a correction to re-coup your lost principal? Retirees have less time to get back what they lost compared to a younger investor. If you find yourself loosing sleep and worrying about market conditions then consider an annuity because it is an insured investment that can protect you from some of the risks of investing in stocks and mutual funds. Donít forget more safety could mean smaller gains. Some risk may be worth taking to diversify your portfolio.

Q. How long will I live?
If we had the answer to this question then investing and planning for your future would be easy. Unfortunately, we do not know the answer, but we should count on living longer instead of assuming we will die younger. Annuities can help to extend retirement funding. If you are married or with a female partner understand that on average women live longer than men, the risk for women to outlive their money is higher. That's why many couples consider joint and last survivor life annuities.

Q. Will inflation be a problem I the future?
The rising cost of living is always a concern. Look for an annuity with an inflation indexed rider attached to it. If you choose the inflation rider, your initial payout will be less than an annuity with no inflation rider.

Q. What if I am presently in poor health?
Poor health could mean you qualify for an impaired annuity. Impaired annuities have a higher payout because your life expectancy is lower.


Know How To Shop The Annuity Market!

When it comes to buying an annuity not all companies are created equally. Each insurer calculates their own annuity rates using the following criteria:
  • the amount of money used to purchase the annuity
  • the type of life annuity purchased
  • current interest rates
  • the ages of the annuitant(s)
  • the present long-term bond rates
  • expense and mortality experience of the company
Some companies will offer better rates in certain age and gender classes. Other companies will offer better joint-life, single life, and/or term certain rates. Thatís why when you purchase an annuity it is vital to shop the market. You want to get the best return for your dollar.

Once you purchase an annuity there is no turning back. It's important for you shop the market and see which companies are offering the highest income for your individual needs. That's what we do!

To receive your free personalized annuity income comparison, simply fill out the form below.

Once we receive this information we shop the market for the best annuity rates from highly rated Canadian Insurance companies backed by the Assuris guarantee. Once that is done we will give you the results.

For immediate help call us at 416-880-8552 with your questions or concerns.

You will be able to see for yourself the best rates of highly rated Canadian annuity providers.

After that, we leave it up to you to decide if you would like us to prepare a Personalized Retirement Strategy Plan to determine if an annuity makes sense and can compliment your retirement pension income portfolio.

It costs you NOTHING for this service. What have you got to loose?

We will shop the market for the best rates out there, and give you the results. Fill out the form now and find out why so many retirees have stopped looking in the financial section of the newspaper to see how their retirement plan is doing?

Privacy Guarantee - All information remains confidential.
We will never share, rent, or sell the information you submit to us with anyone.
We delete all personal information once your quote is prepared.



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