Life annuity

Guaranteed income payments for life

A life annuity is an insurance contract that guarantees you’ll receive income payments for life – or 2 lifetimes, for a joint life annuity. Once you’ve purchased your annuity, you never have to worry about how that money is invested or how long your income will last. Income from a life annuity may also qualify for the federal pension income tax credit (of qualified pension income).

Plan details:

Residency requirements

We'll issue a policy only if the policyholder and annuitant(s) are Canadian residents. There is an exception if the policyholder has an existing Sun Life Financial policy with a contractual right to purchase a payout annuity.

Life annuity types

  • Single life annuity
  • Joint life annuity

Issue ages

  • Registered (including locked-in funds): ages 18 to 100*
  • Non-registered: ages 0 to 100*

*Subject to legislation


  • Minimum amount: $5,000 (combined total from all sources)
  • Maximum amount: $5 million*

*Applications with premiums over $5 million are subject to review. Special pricing may apply.

Premium sources

  • Registered retirement savings plan (RRSP)
  • Registered retirement income fund (RRIF)
  • Locked-in retirement account (LIRA)
  • Deferred profit sharing plan (DPSP)
  • Life income fund (LIF)
  • Locked-in retirement income fund (LRIF)
  • Registered pension plan (RPP) funds
  • Non-registered funds

Payment deferral periods

Payments may be deferred for a maximum of 10 years, subject to restrictions based on the source of premium.

Guarantee periods

  • 0 - 40 years, subject to restrictions based on the source of premium

Payment frequency

  • Monthly, quarterly, semi-annually or annually

Payment options

  • Level payments.  Payment amount remains the same throughout the payment period.
  • Indexed payments. Income increases yearly by a fixed percentage. You select an increase between 1% and 4% at purchase. Not available for prescribed annuities.
  • Reducing payment (joint life annuities). Income reduces by a certain percentage selected at issue when one of the annuitants dies.
  • Integrated payment. Income decreases when CPP, QPP or OAS payments begin. Not available for prescribed annuities.
  • Registered funds are subject to legislative restrictions.


  • Registered. Income from an annuity purchased with registered funds is fully taxable to the policyholder in the year it's received.
  • Non-registered. Only a portion of the income from an annuity purchased with non-registered funds is taxable. The amount of tax and when it is payable depends on the tax treatment the annuity qualifies for.
  • Withholding tax. Canadian withholding tax is mandatory for annuities purchased with RPP (locked-in and non-locked-in), LIF or DPSP premiums.

Death benefit

Death benefits depend on whether income has started, the source of premium and the guaranteed period chosen.


A payout annuity cannot be partially or fully surrendered and has no cash surrender value.

Essential Care Annuity

If you have a life-shortening condition, we'll consider issuing an enhanced life annuity. This can result in a lower premium or higher income than for someone of the same age and gender without a health impairment. You must provide acceptable medical evidence and special underwriting rules will apply.

Purchasing annuity products

  • Step 1
    Find an advisor

    An advisor’s job is to help you understand how different products – each with their own features and options – can best meet your individual needs. Talk to your advisor; if you don't have an advisor, find one you're comfortable working with. There’s no cost to talk to an advisor.

    Find an advisor

    How advisors help

    Tips on finding the right advisor

  • Step 2
    Meet with your advisor

    To get the most out of the meeting with your advisor, take some time beforehand to think carefully about what you want to achieve. To help your advisor recommend the right products for your needs, it will be helpful if you gather some basic information about your income, assets and liabilities – including your savings, investment and pension plan statements.

  • Step 3:
    Make your investment

    Your advisor will use an annuity calculator to help you understand your options and then work with you to complete the paperwork that’s required and ensure your money is transferred. Shortly after making your purchase, you will receive a policy document confirming the details of your new annuity.