Katherine Al Haddad

By Katherine Al Haddad

February 15, 2017

Financial Security

4 Reasons to Contribute to an Insurance Company’s RRSP

Article revised on 23 November 2020

If you want to start making RRSP contributions, your first instinct may be to go to a financial institution. But did you know that you could purchase your RRSPs from a life insurance company instead? A number of worthwhile benefits are associated with this option, such as:

1. A complete line of products

At a life insurance company, financial security advisors go out of their way to meet with you in person or virtually, assess your financial needs and help you come up with a comprehensive financial plan that considers every aspect of your financial life. Most financial institutions can’t match the extensive range of products offered at insurance companies, particularly when it comes to protecting your estate.

2. Protection from creditors

If you were to experience financial problems, would your creditors be able to seize your RRSPs? Since 2008, under Bill C-12, the Bankruptcy and Insolvency Act has been amended to place your hard-earned savings beyond the reach of creditors, as they are with annuity contracts and registered pension plans. All registered investments, other than contributions made to a registered plan not issued by an insurance company during the 12-month period preceding bankruptcy, are now sheltered from creditors. Because they are governed by an annuity contract, RRSPs issued by insurance companies offer additional protection.

3. Flexible withdrawals

Life insurance companies offer the most flexibility when the time comes to cash out your RRSPs. In addition, only insurance companies offer life annuity contracts, which are great for people who want to ensure they have income security for the rest of their life. When you purchase an RRSP from a life insurance company, your advisor will draw up a contract that will secure you a guaranteed fixed or indexed income, as you see fit, for the remainder of your lifetime. This contract may even include coverage in the event of premature death, providing your beneficiaries with an income if the unexpected were to happen.

4. Unique guarantees

Certain investments offered by life insurance companies, both inside and outside an RRSP, include specific guarantees, which aren’t offered by other financial institutions. Take segregated funds, for example, which are mutual funds with a clause guaranteeing the principal value on maturity or upon death of the contractholder. As a general rule, standard mutual funds do not include this guarantee.


Note: This article is intended for information purposes only and should not be construed as legal, financial, tax or other advice. The circumstances or factors may vary depending on your individual situation. We encourage you to consult a professional before taking action. La Capitale may not be held liable for any consequences arising from any decision taken based on the content presented in this article.

Need financial advice?
Contact one of our financial security advisor!

Find an advisor
Subscribe to the newsletter