Accumulation annuities (AA) are a kind of guaranteed investment only offered through the insurance industry. They are
very similar to GICs, but because they are offered by
a life insurance company they have different guarantees,
and the added benefits of a beneficiary designation and
potential creditor protection.
an AA, you can start with a lump sum or make periodic
deposits at regular intervals, or on a flexible payment
basis. The value within the annuity grows (accumulates)
as deposits are made and as it earns interest. You can
hold an AA as part of a registered or non-registered savings
or investment plan. You are guaranteed to receive a set
interest rate over a predetermined term, and your
investment is protected by specific insurance legislation.
may not have heard of this investment option, but accumulation
annuities offer unusual advantages for people thinking
of estate planning.
If the beneficiary you've named qualifies, accumulation
annuities are generally protected against seizure by creditors.
This can be a big advantage for business owners and professionals
wanting to protect against an unexpected lawsuit or bankruptcy.
Usually, only registered investments like RRSPs and pension
plans, let you name a beneficiary. But an accumulation
annuity lets you name a beneficiary and avoid the trouble
and expense of estate and probate fees, in case you were
to die. If your spouse is named as your beneficiary, there
are even more advantages.
You can make monthly contributions as low as $50 ($25
for juveniles) or make a lump sum payment any time.
Choose from a variety of investment terms, either daily
interest account, or guaranteed interest accounts.
terms, or you choose the end date
Normally, terms are 1 to 5 years. But you can choose a
specific date, when you expect to need your money back.
You can lock in your interest rate up to 45 days before
you deposit your money.
Unlike many guaranteed investments, our accumulation annuities
are fully redeemable. That lets you get all or some of
your money if you need it unexpectedly. There may be penalties.