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13. Give to family members
Use an income annuity to create a cash flow for gifts to family members by taking advantage of the exclusion of gifts with funds to be used for education funding, lifetime donations or vehicle rentals or purchase payments.
14. Diversification tool
Use the various indexing options available from a fixed indexed annuity or the investment options of variable annuities to create a diversified approach to meeting consumers’ accumulation goals.
15. Minimize the risk of a return sequence
Use the principal protection of fixed deferred annuities to protect yourself against the risk of large market declines in the early years of retirement.
16. Create a Lifetime Income Stream
Swap the cash value of an unnecessary permanent life insurance policy for an annuity product using a tax-free swap.
17. Accelerate income generation
Use the tax deferral provision of annuities to earn interest in three ways: interest on principal, interest on interest, and interest on tax savings.
18. Retirement income supplement
Use the annuity and optional income riders of annuity products to create a protected stream of supplemental retirement income.
19. Advantages in probate and inheritance
Use the intrinsic features of deferred annuities so that the proceeds of an annuity go directly to the named beneficiaries and possibly avoid probate time and costs.
20. Zero is your hero
Use the structure of fixed indexed annuities to ensure that the principal paid for the contract is not lost due to market downturns. The purchaser of a fixed indexed annuity never receives less than zero percent interest during a credit period.
21. Income planning for small businesses
Use the income options of a deferred annuity to create a lifelong income stream for qualifying small plans by making the annuity a qualifying plan investment.
22. Obtain living benefits
Use the contractual benefits and optional endorsements of deferred annuity products to obtain living benefits such as waiver of retirement home buy-back fees, waiver of buy-back fees in the event of terminal illness or withdrawals improved income for chronic disease. The living benefits available will depend on the overall benefits offered by the subscribing life insurer.
The ideas above only scratch the surface of how the tax-advantaged structure, income options, product guarantees, and optional living benefits of annuity products can be used as a tool to help consumers raise their financial concerns. financial challenges.
As our society continues to age, annuities are one of the only financial products that offer the features and benefits necessary to provide guaranteed safe income options to pay the costs of increasing life expectancy.
Harry N. Stout was President of Fidelity & Guaranty Life, Deputy Managing Director of Old Mutual Financial Network and Managing Director of Insurance Insight Group. He is the host of the FinancialVerse podcast and author of FinancialVerse Personal Finance Books and of Annuities Today – A Tool to Create Protected Lifetime Income.
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