Life Annuities may be one of the greatest ignored financial tools of the last 5 years, but why?
Some people shy away from Life Annuities in Canada these days because of the lower interest rate environments, and the fear of what happens if they die prematurely, and do not receive all of their initial investment back?
These are two significant fears that we constantly hear from Investors who are fed up with market volatility and the erosion of their future wealth. One way to combat these two fears is by using a GMWB or a GLWB investment.
A GMWB addresses both of these concerns with clients in a very unique way.
1. A GMWB account can receive a 5% Income Base bonus for every year that the investor does not touch the principle, or its market value, whichever is greater. Let me say that again, Whichever is Greater! So the worst return you would receive would be a 5% bonus on your initial deposit, compounded annually into your account base. And as well, through powerful guarantees and the ability to reset your deposit every 3 years, there is next to no downside risk, whether the markets go up or down.
2. A GMWB gives you a guarantee of lifetime income, whether you live to 80, 90 or even 100. But what happens if you die prematurely? In a normal Annuity, there is generally a maximum guarantee of 10 years worth of payments, and if you pass away in your 11th year, then the remainder of the principle invested is absorbed by the Insurance Company, with no further payments to your beneficiary, unless it is set up as a Joint Annuity. The problem with joint annuities is that you take less in principle today, for the guarantee of lifetime income for both. With a GMWB, you are guaranteed an income for life, and whatever you do not use within your lifetime is returned to your beneficiary. This will give you the confidence of a lifetime of income, and the residual goes to your family, not the Insurance Company!
If you have not had a chance to look at a GMWB Investment as of yet, you are selling yourself short, and before you make any decisions about Life Annuities download the Income Stability Report to see how this may compliment your future income strategy.
With an Income Guarantee of 5% or market value, and the residual value of your account going to your beneficiary, a GMWB Strategy may be just what you are looking for.
Call us today to find out more and receive your Free Income Stability Report 1-800-924-6385