What does retirement mean to you? You might look forward to spending time with your grandchildren, indulging in a favorite hobby, playing endless rounds of golf, or exploring the world. Whatever your goals, they likely depend on a reliable source of income.

That's where annuities come into play. These insurance products are designed to help you accumulate tax-deferred savings as you prepare for retirement and provide a steady income stream once you retire.

Annuities are long-term contracts insurance companies offer to help you grow your retirement income. You invest your money in these contracts, and in return, you receive income through regular payments.

An annuity is a long-term investment that guards against the possibility of outliving your income. Through a process known as annuitization, your purchase payments—what you contribute—are transformed into recurring payments that may last a lifetime.

Annuities are risky investments, and your money could lose value, but the guarantees and protections depend on the insurance company's capacity to pay claims. These assurances do not cover variable accounts because they are susceptible to investment risk, which includes the possibility of principal loss.

Like any investment, annuities come with risks. For instance, if you pass away before the payout period, your beneficiaries may miss out on annuity payments. Additionally, accessing or withdrawing money from your annuity account can be challenging after you've invested it. It's crucial to research the insurance company underwriting the annuity. Key risks include:

Missing the Income Benefit

Annuities are designed to provide a lifelong income stream. You may miss out on this long-term benefit if you pass away suddenly. Some annuities allow you to name a beneficiary, but this may cost extra.

Tying Up Money

Once you've invested in an annuity, accessing or cashing out those funds can be difficult if you suddenly need them. For instance, some immediate annuities restrict access to your principal after investment, even though payments begin immediately.

Insolvent Insurance Companies

Since annuities are long-term investments, ensuring the issuing company is financially stable is important. Research the credibility, history, and credit standing of potential annuity providers.

Contact Us

To learn more about how annuities can help secure your retirement, contact Direct 2U Insurance  in Ontario. We're here to help you understand your options and find the best solution for your financial future. Visit us today to explore how annuities can provide a stable income during your retirement.

It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options

If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.

Contact us today to help you with multiple options to choose from.