Page 234 - A Canuck's Guide to Financial Literacy 2020

234

Each time, money is deposited into an accumulation annuity, interest is earned. The interest
may be on a daily, monthly or compound basis. Interest

Funding an Annuity

Funding an annuity refers to how the stream of income will generate via. Funding may be
made via lump sum or deposits made over a period of time. Funding will depend on each
person's goal.

An individual who would like an immediate annuity would likely fund the annuity via a lump
sum or a transfer of lump sum such as funds originating from a Locked-In Registered
Retirement Savings Plan.

If an individual would like their payments to start 5 years from now in a form of a deferred
annuity, they may fund the annuity through a series of deposits.

Assuris Coverage Protection

When investing in annuities, you can be comfortable knowing that they're covered by
Assuris. Assuris aims to provide investor with comfort knowing that they'll be there to offer
support if an insurer becomes insolvent and cannot meet their financial obligations.

If for example, an insurer who has issued an annuity can no longer meet its payment
commitments, Assuris will provide payment in full up to $2,000 per month.

If the payment on a payout annuity is greater than $2,000 a month, Assuris will cover either
$2,000 per month or 85% of the promised benefit whichever is higher.

If your life insurance company fails, Assuris will seek to transfer your policies to a solvent
life insurance company. Assuris guarantees that you will retain at least 85% of your
insurance benefits that you were promised.