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Avoid Annuity Taxes

Avoid Annuity Taxes

Most people who have annuities leave it to their beneficiaries after they pass, rather than using the money themselves. It’s wonderful to be able to leave money for your family when you’re gone, but did you know that they will have to pay a large amount of taxes on the money they receive from your annuity? Your beneficiaries could avoid those heavy taxes and have the chance to double the money if you moved it from an annuity into a single premium whole life insurance policy.

For example, Mary is a 65 year old non-tobacco user and has $100,000 IRA annuity that she plans on leaving to her daughter who is in a 28% income tax bracket. Upon Mary's death, her daughter will have to pay $28,000 in taxes on the $100,000! Therefore, the daughter will actually receive only $72,000 instead of the $100,000 Mary intended to leave her.

If this money were reallocated to a single premium whole life insurance policy, the beneficiary could receive a $174,062 death benefit and it would be 100% INCOME TAX FREE.

By simply moving your money from an annuity into a single premium whole life policy, you could leave your beneficiaries with more money than you paid, and they wouldn’t have to pay income taxes on the money.

With single premium whole life, your beneficiaries still have the opportunity to avoid the lengthy and costly probate process. Some policies also offer riders that allow you to have access to a portion of the cash value if you become terminally ill or require care in a nursing facility. Single premium whole life allows you to leave your beneficiaries more money with fewer taxes while still having some of the benefits of your annuity.

If you’re interested in changing your annuity into a single premium whole life insurance policy, fill out the form to the right or give us a call today. One of our licensed agents can give you a free quote and help you decide if this is the right move for you.

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