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Canadian Life & Health Insurance Facts // 2025 Edition 18 Annuities are insurance contracts sold by life insurers as either an accumulation product or a pay-out product. Accumulation annuities build up funds for the future through contributions, income and capital growth. With a pay-out annuity, in exchange for upfront contributions, life insurers make regular benefit payments for a specified number of years, or for the lifetime of the insured. A segregated fund is a separate fund maintained by a life insurance company where the value varies depending on the market value of the assets being held. A segregated fund is kept separate from the general assets of a life insurance company. Segregated funds provide potential growth and can be included as the underlying investment in a deferred annuity or a pay-out annuity. Segregated fund annuity contracts are available only through licensed life insurance advisors. Sold as Seventy per cent of annuities is purchased through a group plan. Retirement Solutions L I N E S O F B U S I N E S S 70% 30% Individual policies Group plans Life and health insurers manage retirement savings for over 10 million Canadians Over eighty-five per cent of small businesses that provide pensions, Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and Registered Retirement Income Funds (RRIFs) to their employees offer these through life and health insurers. Benefits of owning life annuities Life annuities aren't like other retirement income products. Here's what they offer that's different: Lifetime income benefits that reduce the risk of outliving your savings Sources of annuity contributions Pension plans can lessen the investment and longevity risks of defined benefit plans by transferring these risks to insurers to manage Maturity guarantees mitigate the risk of volatile investment returns Pension plans RRSPs & TFSAs RRIFs Non-registered savings $ 72.9B 2024 annuity contributions 2024 annuity contributions