Use Annuity Money to Fund a Life Policy: A New Solution

Annuity to fund life policy

The best agents will find a way to fund important insurance policies. After all, we all know the trouble with trying to sell a policy that a client doesn’t want to pay for.

And a great way to create money is through an annuity. But, we run into a stumbling block, because you can’t roll an annuity into a life policy without taking a tax hit, and clients have to deal with this themselves during tax season.

Here’s what we used to do: We’d put a lump sum into a single premium immediate annuity (SPIA), and we used part of that money to annually fund a life insurance policy. It got confusing, because the annuity would be with Company A, and the life policy would be with Company B. The client was totally responsible for remembering to file that in their taxes.

It’s been a confusing situation for both us and the client.

Until now.

We’re excited to announce a company that provides an excellent program that solves this hassle.

We can now take annuity money and hand it over to this new company — they do the rest.

  • They annuitize it,
  • compute the numbers on it, and
  • use the remaining money to buy a 10-pay whole life — safe and sound.

Not only does this solve a common problem, but you’ll make 2 commissions — one on the annuity, and one on the life policy.

Here are the cliff notes of the product:

  • Issue Ages: 0 – 80
  • Maximum face amount: $300,000
  • Level income to equalize taxable income over 10 years
  • Simplified underwriting (you will have a decision on the spot in most cases)
  • Lifelong coverage protects your client’s family against financial loss
  • Dividends payable
  • Life premiums paid automatically

To make sure this hits home for you, here’s a sample case.

You have a female client, age 65, non-tobacco with $100,000 in a tax-deferred annuity (past surrender charges).

The $100,000 will generate a monthly income of $917.81 for next 10 years.

We project tax withholding at the 20% bracket ($58.56 withheld each month).

She buys a $148,590 life policy that is paid up in 10 years.

If the client should happen to die before the 10-year payout, the beneficiaries will receive the remainder of the payments plus the death benefit.

We have been looking for this type of program/product for a long time.

The wait is finally over. Contact Kirk for more details.

 

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