PI Financial Services

Strategy: Insured Annuities


The Insured Annuity strategy is designed for individuals that are looking for an enhanced after-tax retirement income, but at the same time preserve their capital investment. To start, you would purchase a prescribed annuity contract and an exempt life insurance policy. The annuity would generate a payment stream that would pay the life insurance premiums and the tax on the annuity. The remaining amount is used to supplement your retirement income. Since a prescribed annuity yields a higher return than many traditional fixed-rate investments, and it has a preferred tax treatment, this results in a higher after-tax return. This rate of return is guaranteed for life.

An Insured Annuity can often considerably increase a client's net cash flow. The proceeds of the life insurance policy will pass, tax-free, to the client's heirs at death. Moreover, the insurance proceeds will bypass the estate, eliminating probate fees and estate taxes.

Who It Works For:

  • You are aged 60-75.
  • You have sizeable non-registered liquid investments (preferably GICs, bonds, bank account).
  • You are risk adverse, but looking for greater after-tax cash flow for retirement.
  • You want to retain your capital investment to leave to your family or a charity.
  • You are receptive to long-term planning strategies.