Annuity Rate Shopper Blog

10 Things to Remember When Structuring Annuitant Driven Contracts

ryan — Wed, 06 Jul 2011 00:01:53 +0000

There are so many things to think about when purchasing an annuity. But there are some things you can do right away when you are filling out the paperwork to make sure it’s all filled out correct. Using a capable company like www.annuityrateshopper .com will help ensure that your contracts are set up properly.

The death benefit is paid at the annuitant’s death - not the owner’s death - to the annuitant’s beneficiary. If no annuitant’s beneficiary is named the death benefit will be paid to the estate
The Owner controls the annuity contract, names the beneficiaries and can change them at any time.
The owner of the annuity contract is responsible for the tax liabilities.
If a contingent annuitant is named, then no death claim will be paid upon the death of the primary annuitant. The contingent annuitant will replace the primary annuitant as the annuities new primary annuitant.
If the owner and the annuitant are different on the annuity contract a beneficiary should be named for each.
On these annuity contracts the death of the owner, not the death of the annuitant, triggers the five year deferral rule.
The death of the owner, no the death of the annuitant, triggers the annuity spousal continuation.
The death of both the owner and annuitant must occur to receive the stepped up death benefit (Only applies to variable annuity contracts) and affect spousal continuation.
When one of the joint owners on a contract dies, the IRS considers them both to have died and the deceased owner’s beneficiary contols the contract.
The spouse must be named the sole annuitant’s beneficiary as well as the sole owner’s beneficiary in order to continue the contract.

Annuity Rates 2011

ryan — Thu, 31 Mar 2011 16:16:05 +0000

Annuity Rates 2011
Fortunately, for the record number of Retirees also knows as the “Baby Boomers” Annuity Rates in 2011 have started to creep up. While rates still have plenty of room to rise there is no telling when that rise may happen. People have been waiting for cd and annuity rates to rise for over three years now, and unfortunately there has not been much change. Now, in 2011, the Federal Reserve and Ben Bernanke are committed to keeping rates low attempting to boost the stock market. Although everyone will benefit from a rising stock market it is the retired person who really gets hurt when the stock market goes down. Unfortunately, Retirees need income now and the stock market is one of the least attractive places to invest. If you are retired, although the stock market may make up a portion of your portfolio the bulk of your portfolio will be in much safer products, like annuities that are geared to delivering income , which consequently are tied to interest rates.
Retirees who need to create as much guaranteed income as possible (similar to social security or a pension) only a couple options with the most attractive currently being annuities. Immediate Annuities and Fixed-Indexed annuities have offered the best rates in 2011, when compared with CDs. Unlike bonds which decline in value if interest rates rise Annuities do not lose value in a rising interest rate environment.
It remains a challenging environment for the fixed income investor. But with the right mix of Stocks, Bonds and Immediate Annuities and Fixed Annuities you will be well suited to take on any type of market the economy and the Federal Reserve creates.

Immediate Annuity Payouts - Explained

ryan — Tue, 01 Mar 2011 17:31:34 +0000

Here is brief description of how immediate annuities work and the different payout options to choose from. All immediate annuities will pay either a monthly income or an annual income to the owner of the contract for life. If the monthly payment option is selected payments will begin 30 days after the contract is issued and continue monthly. If the annual payment option is selected the payments will begin 1 year after the contract is issued and will continue annually.

*All options can be with single or joint life. Joint option can be selected, in which case the annuity is based on the lives of both annuitants. The monthly payments stop at the death of the last annuitant.

Life Only: Pays a monthly income for the life of the owner. When the owner dies the income stops. (highest payout option)
Life with Period Certain (10, 15, 20): Similar to Life only but the owner is allowed to choose a period certain option. The options available are 10, 15 and 20 year period certain. If you choose this option with a 10 year period certain you would receive guaranteed income for life with at least 10 years of guaranteed payments. The way it works is if you were to die in 5 years it could continue to pay a named beneficiary for the remainder of 10 years (the period certain). If you lived 40 years and then died the payments would stop at your death. (Payouts are slightly less than the Life only). The benefit to the owner is it protects against pre-mature death and the insurance company keeping all of the money.
Life with Installment Refund: Pays a monthly income for as long as you are alive but guarantees to return 100% of your initial investment if you die prior to getting it all back. If you die prior to receiving 100% of your initial premium it will continue monthly payments to your beneficiary until your entire premium is received.
Life with cash refund: Similar to Life with installment refund above. The one difference is if you die prior to receiving 100% of
Life with 3% COLA: This is similar to Life only except that your monthly payments are guaranteed to increase by 3% each year payments are begin made. Payments are considerably less than life only.
*Joint Life with 50% reduction: This option is only available for in joint contracts. Monthly payments will be made to the owner’s until the death of the first spouse. Upon the death of the first spouse payments will continue to the remaining spouse at a 50% reduction of the initial payment. This option will have a higher payout than joint life only. This is a great option to maximize income for a couple who expects costs to go down in the future.

Annuities for the future

ryan — Tue, 15 Feb 2011 18:44:53 +0000

There was a great article today on www.cnbc.com Annuities in 401(k) Plans Offer income, but High Fees, which discusses alternative ways for baby boomer to receive guarnateed income from their retirement savings. It’s always a good idea to talk with an expert about which type of annuity may be right for you. In most cases it’s not the fees that one should be concerned about it’s the amount of income you will be guarnateed and the trade-offs between retaining control of your money or maximizing income. Give us a call at 888-515-7152 for expert annutiy advice. or visit us at www.AnnutiyRateShopper.com

Fixed Annuities or Bonds?

ryan — Mon, 14 Feb 2011 22:46:32 +0000

As a Certified Financial Planner© I am constantly being asked what is going to happen to bond prices if interest rates go up. Unfortunately for many people that own bonds, if interest rates go up, the price of their bonds will go down. As more and more people are entering retirement and looking for safe places to put their money bonds are traditionally a safe bet. However with historically low interest rates it is more likely that interest rates will rise and bond prices will fall in the future than vice a verse. One strategy that we are recommending is that people shift a portion of their fixed income allocation into short term Multi Year Guaranteed Fixed Annuities. The main benefit here is that when the contract is up you can reinvest your principal plus interest from your fixed annuity into some other investment without any penalty. Not only that but if interest rates go up you don’t have to worry about the value of your fixed annuity going down, because fixed annuities are not subject to the same price fluctuations that bonds are.

For example, you can get a 6 year fixed annuity paying 3.35% each year of the contract. At the end of the contract you get you get all of your money back plus interest. It doesn’t matter what happens to rates. In the meantime if you needed to access your money your could get 10% of your value each year.

Fixed annuities are a great alternative to bonds in a rising interest rate environment. For more information visit our site, www.AnnutiyRateShopper.com or email me at ryan@annuityrateshopper.com or call me at 888-515-7152.

Immediate Annuity Rates

ryan — Mon, 07 Feb 2011 21:13:12 +0000

Immediate annuity rates are slowly coming back up. With over 2 years of depressed rates on fixed annuities and immediate annuities we are now starting to see rates pick back up slowly. In fact I was able to 70 year old client almost 8% on an immediate annuity that will pay him and his wife a monthly income for as long as they live. If you’re interested in what we can do for you, give us a call 888-515-7152.

Lincoln Financial - New Directions 6

ryan — Fri, 04 Feb 2011 22:22:18 +0000

Lincoln New Directions 6 Fixed Indexed Annuity is the best fixed indexed annuity on the market today. Here are the details:

* Lincoln Financial
* 6 year contract
* 4.55% Performance Trigger
o If the S&P500 is either flat or positive for the year you get 4.55% interest for that year (even if the market was only up 1%)
* Minimum guarantee 1.75%
* 10% Free Withdrawals Available immediately.

American National - Palladium Fixed Annuity

ryan — Fri, 04 Feb 2011 22:21:09 +0000

This is the best multi year guarnatee annuity product out there. There is a fixed annuity by Liberty Bankers, but in all honesty the rating with American National is that much better. Here are details on the American National - Palladium Fixed Annuity:

Mutti Year Guarantee Annuity:

* American National
* 6 year term
* 3.35% Interest - Guaranteed Each year
* 10% free withdrawal starting in 2nd year

Short Term Fixed Annuity

ryan — Fri, 04 Feb 2011 22:19:20 +0000

My recommendation to all of our clients is to stick with a short term fixed annuity. Don’t get sucked into a longer term annuity so the agent can make a bigger commission. The sweet spot for annuities right now is the a 5 or 6 year fixed indexed annuity or a multi year guarantee fixed annuity.

Lincoln Money Guard

ryan — Tue, 30 Nov 2010 21:33:55 +0000

I get asked a lot about this product called the Lincoln Money Guard, and if it really is all it’s cracked up to be. The answer is Yes, if it provides you what you want. With yields on fixed annuities and other annuity and cd products at all time lows investors are having problems tying up their money for 5+ years to get a measly 3.50% interest. The Lincoln Money Guard product isn’t going to give you any yield on your money but it does provide a nice trade off while you wait for interest rates to go up. There are no surrender charges on this product which is a very nice feature, you can purchase it today and take it out tomorrow if you find something better. But while your money is invested you you have a death benefit feature should something happen, a long term care benefit should something happen all of which are substantially more than what your initial premium was. The way I position it is this. If you’re going to leave your money in the bank at 0% interest you may as well get some ancillary benefits for it, and purchase the Lincoln Money Guard.