# annuity rates



## mylund39 (Jan 15, 2011)

I use to be able to get the latest annuity rates on the internet(MonySence) but recently can't find anywhere.
Does anyone know a site that offers annuity rates without having to reply.
Regards


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## MoneyGal (Apr 24, 2009)

CANNEX.com provides current rates for a 65-year-old male with a 10-year guarantee. 

Go to CANNEX/Canada/Products/Annuities. 

By convention annuity quotes are given as the monthly payment for a $100K immediate deposit.


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## leoc2 (Dec 28, 2010)

try this for joint life annuity

http://www.lifeannuities.com/annuity_rates/joint10yrnonregistered.html


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## OptsyEagle (Nov 29, 2009)

leoc2 said:


> try this for joint life annuity
> 
> http://www.lifeannuities.com/annuity_rates/joint10yrnonregistered.html


Wow. Two people age 75, $100,000 gets you $622 per month or $7,464 per year. One of them has to live to 88 just to get their money back. 

I would imagine they are actuarily expected to do so, but there can't be very much interest in there, is all I can say.


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## MoneyGal (Apr 24, 2009)

There is a 66% chance that at least one member of a healthy couple, both aged 75 today, will still be alive at age 88. So, they have a 66% chance of "getting their money back." 

There's a 22% chance at least one of them will be alive at age 95.


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## OptsyEagle (Nov 29, 2009)

MoneyGal said:


> There is a 66% chance that at least one member of a healthy couple, both aged 75 today, will still be alive at age 88. So, they have a 66% chance of "getting their money back."
> 
> There's a 22% chance at least one of them will be alive at age 95.


and I can imagine that if even one person makes it to age 95, the insurance company will need quite a few annuity buyers to lose money on their contracts, to come up with the money to pay that one who didn't.


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## MoneyGal (Apr 24, 2009)

We could go around and around on this. 

It's insurance. 

Lots of people buy house insurance to protect against the risk, however small, that their house will burn down. 

Do people who have house insurance complain that they "didn't get their money's worth" because their house didn't burn down? 

I'm not (intending to) pushing annuities here, but I am suggesting that "getting your money's worth" isn't the best way to think about these products. 

They're insurance. They allow you to transfer risk over to an insurance company, who will pool your risk with other people such that the risk is shared across the pool. 

As a secondary point, the risk that you will outlive "life expectancy" is actually quite high. Most people (apparently) do not contemplate living to a range of ages, but have some fixed idea about how long their life is going to be. The chance of dying in the year of your "life expectancy" (at birth) is very very small. 

Also, I'm not sure that people understand that life expectancy increases as you age...your remaining expected lifespan at age 75 is not 81 (current unisex life expectancy at birth for Canadians).


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## steve41 (Apr 18, 2009)

MG, I don't know the answer to this, but do the Insurance companies push annuities when rates are high? Remember when the rates were sky high during the OPEC crisis? I would love to have purchased a life annuity then.


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## CanadianCapitalist (Mar 31, 2009)

My understanding is annuities are definitely not pushed by advisors. Reason is simple: the commissions on annuities are very low compared to commissions in traditional investments.


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## MoneyGal (Apr 24, 2009)

At advanced ages, which is really the only point at which people should contemplate purchasing these products in general, interest rates are only a very small fraction of the total return on an annuity. 

If you buy an annuity "when rates are high" it makes a difference if you are younger. But as you age, the impact of interest rates decreases quite rapidly.

Also: I'm not sure that insurance companies ever really "push" annuities (other than variable annuities) and it has to do with more than commissions for advisors. Annuities are risky for companies, completely independent from interest rates. And the annuity purchase is a one-way street. Advisors don't like them because they get a (relatively small) one-time commission for money which they then completely lose the capacity to manage.


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## MoneyGal (Apr 24, 2009)

p.s. I tried to find a good academic article on the optimal age to annuitize but they are all very calculus-heavy. I'll post a link if I find something.

Editing to say that I'm unlikely to find anything "simpler" than the chapter in Pensionize Your Nest Egg on life annuities, which covers the impact of interest rates on the annuity payout explicitly at pages 77-83.


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## Brian Weatherdon CFP (Jan 18, 2011)

You may notice that advisors who are licensed for insurance planning may include annuities - especially life annuities - for persons over 68 or 70 years of age.... (i) to create a very significant cash flow through retirement years, (ii) to greatly reduce tax on that cash-flow (ie. unregistered money), and (iii) as part of "fixed income" in one's overall asset/product allocation. 

I agree, insurers don't actually "push" life annuities and seem to seldom ever advertise on the subject. Life annuities should arise from a comprehensive financial planning process, to secure income while reducing tax & clawbacks. 

PS: for a partial or full "estate refund" of the annuity purchase, life insurance can cost a fraction of the annuity cash flow. The #s don't always work, but if one wishes to conserve asset value for heirs, consider this.

PPS: if there are no heirs, consider naming a charity or community foundation as beneficiary of remaining payments (of the selected guarantee period of the annuity or life annuity).


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