Factors Affecting Annuity Payments

Annuity payments received by annuitant’s are based typically on five factors:

  1. The amount of money invested in the contract.
  2. The interest rate offered.
  3. Whether the payment is to be indexed and will therefore increase in accordance with the inflation rate.
  4. The gender and age of the annuitant.
  5. Whether a guarantee period is to be provided by the insurer.

The amount of money invested in the annuity contract may be a lump sum or a series of deposits over a period of time. When a lump sum is invested, the annuity payments can begin immediately and this is known as an “immediate annuity”. Otherwise, a series of regular deposits into the annuity contract will fund the payments at a later date, and this is known as a “deferred annuity”.

Interest rates, mortality indicators (gender combined with age), and guarantees will vary among insurers.  Annuity rates differ from insurer to insurer.  It is important to obtain quotes from different insurance companies when searching for good annuity rates. 

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Best GIC Rates

1 Year 1.05%
2 Year 1.35%
3 Year 1.85%
4 Year 2.00%
5 Year 2.05%

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