What should I look for in an annuity – fees/costs, payout, options, etc.?
An annuity is a contract with a life insurance company. When you buy an annuity, you deposit a lump sum of money, and the insurance company agrees to pay you a guaranteed income for a set period of time – or for the rest of your life. Annuities are money commonly used to generate retirement income. Because your annuity income is calculated at the time you buy the annuity, think about the things that affect annuity income: current interest rates, the amount you deposit, your age, your gender, the length of time payments are guaranteed and the options you add. It’s also important to ask about and understand the fees you’ll pay for your annuity. Some annuities can also be used for financial goals other than retirement income – for example, money for your estate or for charity. Learn more about choosing an annuity.
Generally speaking, insurance companies are regulated by the Office of the Superintendent of Financial Institutions (OSFI). However, there may also be provincial regulations that apply.