Six things you need to know about Insurance GICs

1. Beneficiary designations

  • Unlike other GICs, insurance GICs allow clients to name a beneficiary on both registered and non-registered assets.
  • In Quebec, an insurance GIC allows a beneficiary to be named on all registration types.

2. Pension tax credit - clients deserve a break

  • Insurance GICs are eligible for the pension tax credit; those 65 and older can apply.

3. Assuris and CDIC

  • Clients are likely covered by CDIC on their current GICs, where insurance GICs have premium/deposit protection provided by Assuris. You can learn more about CDIC and Assuris at www.cdic.ca and www.assuris.ca.

4. Potential creditor protection

  • Annuity contracts for both registered and non-registered investments could be exempt from creditors. Federal bankruptcy legislation continues this protection in case of bankruptcy. However, protection is not guaranteed. There is no protection available for other non-registered investments, which do not qualify as life insurance or annuity contracts.

5. Payout annuity option available - create a reliable income stream

  • At maturity, an insurance GIC is easily convertible into an annuity income stream for both registered and non-registered investments.

6. Redeemable - just in case

  • Insurance GICs are fully redeemable. Clients have access to all or some of the money if they need it unexpectedly.
  • Keep in mind, withdrawals prior to an investment term maturity date are  subject to a market value adjustment (MVA). An MVA could decrease the value of the investment to less than the original investment amount.

An Insurance GIC is an accumulation annuity. You can ask Sun Life Global Investments to start the annuity payments at any time. Unless you tell us otherwise, the annuity payments will start after the annuitant turns age 100.

Did you know that with insurance GICs clients can:

Avoid the costs of probate

Probate fees can be costly. By naming a beneficiary on their investments they ensure their beneficiaries will receive the full amount they intended to leave.

Avoid the delays of probate

The process of releasing their assets to those in their will can take months and possibly years, depending on the complexity of their estate. Named beneficiaries on their investments avoid this delay as the beneficiary can be paid quickly outside of the estate.

Keep it private

Assets that flow through their estate become a matter of public record. This can lead to disputes between family members over the division of assets. When a beneficiary is named, they can help avoid these disputes as payments are made outside the estate.

Term alert - Probate

Probate is the legal process of administering an estate under a valid will.*

* In Quebec, estates are not charged probate fees.