Clarica has launched the Flexible Income Plan, a new retirement product.

The intention of this product is to provide stable guaranteed income plus the potential for income growth linked to the stock and bond market indexes.

The Flexible Income Plan is a first in the Canadian market, says Clarica, combining “the strengths of a guaranteed income like a traditional pay-out annuity and flexible income that is tied to market returns like a Registered Retirement Income Fund in one income option clients can customize to meet specific needs.”

“People are living longer and they’re concerned about having sufficient income for life,” says Barry Triller, Clarica’s executive vice president, Retail Operations. Life expectancy rates have increased by five years for males and by four years for females in the past 20 years. “The guaranteed portion provides a secure income, and the portion linked to market indexes provides the potential for maximum income. The plan has been developed to keep up with the needs of today’s retirees.”

Clients can receive income monthly, quarterly, semi-annually or annually and they have the option of lifetime income. The amount the client chooses to receive as guaranteed income won’t change unless otherwise specified. The balance of income is linked to the performance of the client’s choice of one or more indexes from among the S&P/TSX 60, S&P 500, MSCI EAFE, Scotia Capital Universe Bond Index and Salomon Smith Barney World Government Bond Index.

Income from the index-linked portion will be added to the base income to determine the clients total income and will be re-calculated or changed at regular intervals based on the performance of the selected indexes. Clients can change their index selection as often as once a month. As needs change, clients may choose three times during
the life of the contract to receive more fixed income.

Clients can select a guaranteed period of up to 40 years. If they die during that period, their beneficiary will receive a death benefit based on the present value of all future total income payments remaining in the guaranteed period.

Clients can allow their survivor to continue receiving income or have it based on the clients own life expectancy.