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a) What Is It?
A Financial Planning Concept that:
Maximizes your spendable income
while
Preserving your financial legacy
b) The Personal Insured Life Annuity is Designed for People Who:
.. Are retired, or approaching retirement.
.. Have guaranteed investments to supplement their RRSPs.
.. Supplement their retirement income with interest from these investments.
.. Wish to leave the principal amount to their family without complications.
.. Want the highest guaranteed returns on these investments.
c) How Does It Work?
It combines a Life Annuity to provide a guaranteed income
with
A guaranteed Life Insurance Contract to replace the capital to be passed on to your
family
d) The Advantages of A Personal Insured Life Annuity
.. Compared to GICs, savings accounts, Canada Savings Bonds and term deposits
the spendable income available is higher.
.. Preserves estate capital.
.. If certain family members are designated as beneficiaries creditor protection is available.
.. Probate and administrative estate costs can be avoided.
.. The annuity receives prescribed tax treatment, which lowers the amount of income
exposed to tax thus not only reducing taxes payable, but also protecting against OAS
clawbacks.
e) Comparative Results
Assumptions 1
.. You have $200,000 invested.
.. A GIC will return 5%.
.. Your tax rate is 46%.
.. You are a male non-smoker, aged 61
f) Interest Rates are Very Low - Is it Wise to Lock in these Low Rates for Life?
In fact it is a wise strategy to wait. It is possible to illustrate how by simply purchasing the life insurance today–at as low a cost as it will ever be–it is possible to wait, and even if interest rates do not increase you will maintain the potential gains simply by becoming older.
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1 This is an actual case quoted in January 2004.
2 Based on standard insurance rates.
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