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For those who want a guaranteed income, annuities are a popular choice.

An annuity can form an important part of your income portfolio by taking the guesswork out of investing for income. Insurance Companies Offer a selection of annuity income solutions to choose from. Your particular income needs will determine which solution is right for you.

INVEST WITH CERTAINTY:

Guaranteed income – for life or a chosen period of time

Higher income rate – you can receive a higher income rate than many other guaranteed income products

Optional protection for your spouse – income can be based on two lives to guarantee future income for you and your spouse

Payment guarantees – ensure a specific amount is paid to you or your beneficiaries, no matter what happens

Tax advantages – for non-registered funds, practical tax deferral is available for your income

Simplicity – a single lump-sum investment can provide security and peace of mind while reducing ongoing investment decisions

Confidence – you’ll rest assured knowing that your income source will not be exposed to volatile financial markets

WHAT IS AN ANNUITY ?

In exchange for a single lump sum investment, an insurer makes guaranteed regular income payments to an investor that contain both interest and a return of principal. Annuity payments can continue for the lifetime(s) of one or two people, or for a chosen period of time.

The income payments you receive are made up of interest and principal and are determined based on:

• Your age (and in certain cases, your spouse’s age), for life annuities
• Current interest rates
• The length of time the payments are guaranteed
• The amount of money used to purchase the annuity

Annuities can be ideal for investors who:

Want the highest guaranteed income amount possible from their investment Wish to help cover essential expenses in retirement Are concerned about outliving their savings Wish to minimize tax on their investment income Value security and peace of mind while reducing the need for ongoing investment decisions Want to subsidize early retirement income Need income until pension and government benefits become available Wish to fund a child’s ongoing educational costs

TYPES OF ANNUITIES

Life Annuities will provide you with guaranteed, regular income for life. They can be purchased as a single life, based on one person’s life, or as a joint and survivor, based on the lives of two people.

Term Certain Annuities provide investors with guaranteed, regular income for a selected period of time. Once this period is over, income payments cease and the annuity contract ends, If the annuitant(s) die before the term ends, the annuity payments continue to your estate or designated beneficiary until the end of the term.

For Term Certain annuities funded by RRSPs or RRIFs, the number of payments is equal to 90, less your age in whole years at the purchase date. If you die before reaching age 90, the balance will be paid to your beneficiary, or if there is no designated beneficiary, then to the estate. You can also have the option of basing the number of income payments on your spouse’s age. The payments would continue until your spouse is 90. For non-registered funds the number of income payments can extend beyond the age of 90.

Annuity with a Guarantee Period: allows an investor to select from zero to thirty years of guaranteed payments. In the event the annuitant(s) dies earlier than expected, the beneficiary continues to receive income payments during the guarantee period.

Principal Protected Annuity is a Life Annuity option that is also known as a cash refund guarantee, this provides a lump sum payment to a beneficiary equal to the difference between the total payments received by the annuitant(s) before death and the original investment amount. Selecting this payment guarantee that the money invested will always be received as income to you or as a legacy for beneficiaries.

Prescribed Annuities: offer preferential tax treatment if you are investing using non-registered funds. Each payment includes the same amount of interest and capital. This evens out the amount subject to tax and provides some tax deferral. A Manulife Annuity may qualify as “prescribed.”

Joint Life and Last Survivor Annuity: Income payments will continue until the later of your death and the death of your spouse. At that time, any guaranteed income payments which remain will be paid to the beneficiary, or if none is designated, then to the estate. If you are purchasing an annuity with funds accumulated under a registered pension plan and you have a spouse, you are required to purchase a joint and last survivor annuity. This requirement may be waived, in some cases, with the signed consent of your spouse.

Joint Options:

Continuing in full: A life annuity payable for your lifetime and, upon your death, continuing for the lifetime of your spouse. You may add a guaranteed term to this option, If all of the guaranteed payments have not been made upon both of your deaths, the balance will be paid to the beneficiary, or if none exists, to the estate.

Reducing on the death of the annuitant: A life annuity payable for your lifetime, which upon your death, will reduce by a specified percentage (usually 50%, 40% or 30%) and continue to your spouse for his/her lifetime. You may add a guaranteed term to this plan.

Reducing on the first death: A life annuity payable for the duration of you and your spouse’s lifetime, which, upon the death of either you or your spouse, will reduce by a specified percentage and continue to the survivor throughout his/her lifetime. You may add a guaranteed term to this plan.

GUARANTEED RETIREMENT INCOME FOR LIFE

If you are interested in securing guaranteed income for your retirement, you’ll want to consider a Life Annuity. With a single up-front investment, a Life Annuity can guarantee a stable and predictable income

for life regardless of market conditions or interest rate fluctuations.

INCOME FOR A SPECIFIC TIME PERIOD

For those who need a guaranteed income for a specific period of time, There are Term Certain Annuities. Once the specific period of time ends, income payments cease. If you happen to die before your payments end, The Insurance Company will continue to make payments to your named beneficiaries until the chosen period is complete*.

PAYMENT GUARANTEES

You can ensure a specific amount of income is paid from your annuity investment to you or your named beneficiaries, no matter what happens.

TAX ADVANTAGES

Many non-registered annuities may meet specific Income Tax Act (Canada) requirements and can qualify for “Prescribed” taxation. Prescribed Annuities offer tax advantages, including level taxation throughout the duration of the contract. Non-prescribed annuity taxation is higher in the early years and decreases over time as principal is reduced. With prescribed taxation, the recipient receives an element of tax deferral and also pays less tax over the life of the contract. Further, for those 65 or older, income from an annuity will qualify for the pension income tax credit and pension income splitting, which offer additional tax relief.

GRADUAL INHERITANCE TRANSFERS

If you want to transfer an inheritance to your spouse or children gradually, as opposed to one lump-sum payment after your death, an Annuity Settlement Option should be considered. Upon death, the proceeds of a insurance or investment plan can automatically transfer into a Annuity that will make payments to your named beneficiaries over a specific time period, or their lifetime.