What Are Payout Annuities?

 

Payout annuities, also known as income annuities, are financial products offered by insurance companies that provide guaranteed, regular income payments in exchange for a lump-sum investment. In Canada, they’re often used in retirement planning to create a predictable income stream for a specific period—or for life.

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There are two main types:

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• Term-Certain Annuities – Pay income for a fixed number of years.

• Life Annuities – Pay income for the rest of your life that can include options for joint payouts or guaranteed periods.

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Payout annuities can be funded with registered (RRSP, RRIF) or non-registered funds and are ideal for those looking to reduce investment risk and ensure stable income, especially in retirement.