Whole Life Insurance Video Overview

I just added a new video on my site that talks about the benefits of a Whole Life Insurance policy.  Check it out below (click on the image):

Or, visit our site and check out the video here:  Benefits of Whole Life Insurance  

You can also visit our main site at:  www.moreyinsurancegroup.com  

What are Immediate Annuities?

Understanding Immediate Annuities

A Single Premium Immediate Annuity (sometimes referred to as an "SPIA") may be the right annuity for you if you are looking for payments that begin right away and continue for the rest of your life or for a specified period of time.

In return for your lump sum (premium), the insurance company promises to make regular payments to you (or to a payee you specify) for the chosen length of time – most commonly for the remainder of your life, however long that may be.

Depending on your requirements, immediate annuity payments start one month after you buy your annuity. When choosing an immediate annuity, you can choose how frequently you receive payments – often referred to as the “mode.” While annuity buyers typically choose to receive payments monthly, you may choose quarterly, or even yearly instead.

In exchange for the guarantee of payments, you give up the right to demand the return of your original premium. Unlike some forms of life insurance or other types of annuities, you are generally unable to revise or cash in the immediate annuity once the 10-day "free look" period has passed.

You can fund your immediate annuity in a number of ways, including cash from a maturing Certificate of Deposit (CD), exchanging monies accumulated in a Deferred Annuity account, proceeds from the sale of stocks, bonds, a home or a business, a lump sum distribution from a tax-qualified defined benefit or 401k, or an IRA account.

An immediate annuity comes with many important advantages. Here are just a few:

·         Security — The annuity provides stable lifetime income which can never be outlived, or which may be guaranteed for a specified period. This advantage is crucially important to annuitants who may have previously feared outliving their savings.

·         Simplicity — An annuity is pretty much “get it and forget it.” Once it is set, the only work you are required to do is collect your regular payments. With an immediate annuity, you do not need to watch markets or track interest rates and dividends.

·         Higher Returns — The interest rates used by insurance companies to calculate immediate annuity income are generally higher than CD or Treasury rates. Since part of the principal is returned with each payment, greater amounts are received than would be provided by interest alone.

·         Safety of Principal — Funds are guaranteed by assets of insurer and not subject to the fluctuations of financial markets.

·         No sales or administrative charges

When you shop for an immediate annuity, you will find that one of the key factors in pricing is your age and life expectancy. In a sense, purchasing an immediate annuity is like making a bet with an insurance company about how long you will live. Since the insurer will stop making payments when you die, it is betting that you won't live beyond your life expectancy. On the other hand, if you live longer than predicted, your return may be far greater than estimated.

Immediate annuity coverage can be increased by including a second person ("Joint and Survivor" annuity), by adding a guaranteed period of time ("Period Certain" annuity), or by guaranteeing that payments will continue at least until the original purchase amount has been paid out ("Refund" annuity). This added risk to the insurer is likely to reduce monthly payments by about 5% to 15%, depending on the age of the annuitants and the length of the guarantee period.

The way your annuity payments are taxed depends upon the source of the funds you use to purchase it.

Qualified Immediate Annuities

When applied to immediate annuities, the term qualified refers to the tax status of the source of funds used for purchasing the annuity. These are premium dollars which until now have "qualified" for IRS exemption from income taxes. The whole payment received each month from a qualified annuity is taxable as income (since income taxes have not yet been paid on these funds). Qualified annuities may either come from corporate-sponsored retirement plans (such as Defined Benefit or Defined Contribution Plans), Lump Sum distributions from such retirement plans, or from such individual retirement arrangements as IRAs, SEPs, and Section 403(b) tax-sheltered annuities, or Section 1035 annuity or life insurance exchanges.

Non-qualified Immediate Annuities

Non-qualified immediate annuities are purchased with monies which have not enjoyed any tax-sheltered status and for which taxes have already been paid. A part of each monthly payment is considered a return of previously taxed principal and therefore excluded from taxation. Non-qualified annuities may be purchased by employers for situations such as deferred compensation or supplemental income programs, or by individuals investing their after-tax savings accounts or money market accounts, CD's, proceeds from the sale of a house, business, mutual funds, other investments, or from an inheritance or proceeds from a life insurance settlement.

Want more information?  Contact us today, Call our office at 844-313-4752, or visit our website for more detailed information on which annuity is best suited for you.  

www.moreyinsurancegroup.com  

Using Annuities To Fund Life Insurance?

You may have used annuities as a savings vehicle as part of your financial plan.  However, now you may find that you no longer need the money in the annuity and you want to pass the money on to your heirs.

But, did you know that the gains on your annuity (the portion that exceeds your original investment), could be taxable income to your heirs?  In addition, the full value of your annuity is included in your taxable estate, which could result in a diminished inheritance.

To maximize your annuity dollars, one strategy is to purchase a single premium life insurance policy on your life with the annuity funds.  The beneficiaries of the policy would then be paid a generally tax-free death benefit and avoid the taxes associated with inheriting annuity funds.

If you are interested in learning more about this strategy, visit our annuity resource page today.  Click Here for more information:  Strategies for Fixed Indexed Annuities

Fixed Indexed Universal Life Insurance

Fixed Indexed universal life insurance (FIUL) is permanent life insurance that offers death benefit protection when death occurs.  Like other forms of permanent life insurance, your premium payments may earn interest and grow the cash value of your policy.

What differentiates IUL from other permanent life insurance is the way interest is credited to the policy. In addition to offering a traditional declared interest rate, FIUL also offers the ability to earn interest that is linked to the movement of a selected stock market index over a specific period of time.

The manner in which interest is credited to your FIUL policy gives you the potential for strong cash value accumulation. A key benefit to remember is that it offers protection in a poorly performing market.

With Fixed Indexed Universal Life Insurance, you don’t participate directly in the stock market and the credited interest rate is never less than zero percent, guaranteed.

Read more here:  Fixed Indexed Universal Life Insurance