Indexed Annuities

Sell Universal Life Insurance - Sell Any Insurance Policy

2011-09-30T13:15:00.000-07:00

Learn how you can sell your Universal Life Insurance policy for a cash settlement or any life issue including Term, Whole Life, UL, Annuity or Endowment.

A life settlement is when a company arrnages for an investor to take over your life insurance policy - whether it is a universal life issue or other policy and you the owner receive a cash settlement. Some of these life issue sales result in cash payouts to policy holders of $100,000 or more.

Universal Life Insurance policies can have good value for re-sale. Sometimes people do not want to continue with premium payments on these issues and would just like to sell the policy for cash. Quality of life is a factor for many people with whole life, term, VUL, annuities and other contracts. We specialize in providing clients with free quotes and advice for people looking to sell a Universal policy or other insurance issue.

Cash payouts are provided. See what you life insurance is worth.

Visit:
How to Sell a life policy

Forex Course

2011-07-18T06:28:00.000-07:00

A great Forex FX megadroid course and system. Got VERY high ratings from our students and investors.

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401k cost providers

2011-03-07T04:32:00.000-08:00

American Investment Training provides 401k plan set up help and question answering. Our company is a global training company where we provide free assistance and help to assist small businesses in 401 k plan provider and set up help.

Using qualified plan administration firms is a key in giving proper service to the employees and managers. Understanding fees, software and other 401k admin issues are of most importance. Our company handles regulations and rules compliance with the firms we work with. AIT is a respected and recognized compliance company.

We can assist in answering any question you have and repsonding with our administration specialists and third party plan experts.

Visit American Investment Training's 401k help contact page:
401 k set up questions

Series 3 Commodities Broker Training - Series 3 - Classified Ad

2010-10-13T12:49:00.000-07:00

Series 3 Commodities Broker Training - Series 3 - Classified Ad

Charitable Remainder Annuity Trust

2010-05-28T10:55:00.000-07:00

A charitable remainder annuity trust can be done in an estate plan where a fixed income interest passes at least annually to one or more non charitable beneficiaries and at the death of the last income beneficiary or at the end of a term or years not greater than 20 years.

Learn how to lower your taxable estate using allowable tax rules. Avoiding Probate and knowing how to properly fun a trust in an estate is one of he most important things you can do for yourself, family and or business. Learn how to use your life insurance and other assets to avoid paying high estate taxes.

Contact American Investment Training for free estate tax planning help

Visit: Estate Tax Help
Annuity

The right to receive one or more payments for life or for a term of years.

American Investment Training

Selling Life Insurance Settlement Company - Sell a Life Policy

2010-05-14T06:43:00.000-07:00

National company with buyers throughout the country will evaluate your life insurance settlement options How you can sell your life insurance for a cash settlement

YES. There is a growing market for policyholders who for various reasons NEED TO SELL their life policy.

Reasons to consider life insurace settlement options or to sell a policy.

The life insurance policy is no longer needed or wanted

The premium payments have become unaffordable and they are considering surrender of the policy for cash value

Insured qualifies for a new life issue which is more affordable than old policy

The issue was taken out by a business to insure a key employee, and the business no longer needs the coverage it provides

The insurance policy is about to lapse

Change in estate planning and financial circumstances have changed and there is a need for cash now to cover a major purchase or improve

quality of life and change in life circumstances

There are many reasons why someone should explore the cash settlement option to transfer a policy. These transactions are done all of the time. We are an expert training company and life settlement advisors. We help customers and brokers.

The most suitable to consider transferring or selling their life policy for cash

Most of the time, the age group should be people 55 and older and where the life insurance is worth $100,000 in face or more. In these cases, a sizable market may exist for someone to buy your issue and create a cash settlement option for you.

Visit: www.howtosellmypolicy.com or go direct to a no obligation, easy to use form: Sell a Life Insurance Policy

Independent Insurance Broker Set Up - Insurance Agent

2010-03-25T14:48:00.000-07:00

American Investment Training can set you up as an independent Insurance agent or broker through one of our many brokerage firm clearing contacts. If you are an experienced Life and Health insurance agent and wish to get set up as an independent office - appointing with one of our broker dealers including Series 7 sponsorship may be available.

These independent opportunities are best for producing agents who sell Annuities, Life Policies and other insurance based product. Producing Stockbrokers, Financial Advisors and planners are also welcomed. These include Series 7 Licensed and Series 66 (65 and 63). Series 7 Sponsorship may be offered to established insurance brokers and agents looking to open their own office and get set up as an independent.

All inquires are kept confidential. We are the training company for many of the largest insurance services companies in the country. We will speak with you directly first to see what your needs are. No fees.

Top Product from major insurance carriers

American Investment Training

Go to the contact form here: Independent Insurance Broker Office

High Annuity Concession Payout

2010-03-04T17:22:00.000-08:00

American Investment Training has relationships and connections with dozens of the highest paying insurance brokerage sellers in the business. There is no fee for this service and you may have an opportunity for a higher concession payout on many of the the annuity and life product you are already selling

We are looking for experienced and producing life insurance brokers - mainly focused on high premium cases who are looking for more relationships that could compensate them more with a higher commission.

This is a national program designed to connect successful life insurance and variable product agents to our high end carrier sellers. These are also non exclusive. Simply use the connections for your next Annuity or Life case

Contact Nick Hunter at American Investment Training for fixed and variably annuity manager introductions. This also includes Universal Life, Whole Life and other cash value insurance products.

Nick Hunter
631-675-1197
or contact direct through their website: American Investment Training

Selling An Insurance Policy

2009-12-09T11:33:00.000-08:00

Sell Insurance To Raise Money

As time goes on, money hardships can strike a person and family. This is especially true during hard economic times, poor health leading to medical expenses and other serious quality of life issues. When someone is looking to sell and insurance policy to raise cash or money, it is usually a pretty serious situation. When I evaluate a person's situation - I want them to understand what the value of the potential cash influx now compared to the eventual death benefit years ahead. We also talk about (and quite frankly), where a life expectancy can be (if a terminal illness is involved).

Is the potential money offer when someone is looking at selling their insurance plan of a greater benefit to their quality of life for themselves and their family?

Age

The best offers that I get are for people normally over 65 years of age or who have an illness where the prognosis is not good. Yes - this is not a happy business sometimes to even talk about, but when someone at a certain age truly needs the money - it can help them a great deal. There are still many people who are eligible to sell transfer their insurance and know how to. The greater the age - the higher the cash offer in most cases.

Insurance Premium Too High

A major reason people ask me "how can i sell my policy?" is the cost of the policy is too high. There are many people who even let these life policies lapse - worthless! What a waste. If someone meets the other criteria (age, policy type, illness), then the cost of the premium can be a big factor of getting a deal done for you and your family.

Types of policies that can be sold

There is a wide range of life insurance types including Whole Life, Convertible Term, Variable and some others. Generally as long at it is an individual life policy and can be convertible - it can be sold for a cash settlement.

Always examine the pros and cons thoroughly when looking to transfer your life insurance policy. For many, the cash settlements are very substantial but not for everyone. At howtosellmypolicy.com, we will educate and inform.

How To Sell My Policy is a free website that allows potential insurance policyholders to submit basic information on their need and get contacted by a professional life settlement advisor.

Variable Live Insurance - VL Policy, VUL Plans

2009-08-17T17:42:00.000-07:00

Insurance policies that offer death benefit protection and cash values are Variable life or Universal Variable Life contracts. Premiums are invested into a separate account of investments. As the variable cash values exceed expenses, the cash value grows. Premiums can be flex or flexible paying.
Variable insurance policy holders can take out loans or borrow on the cash value if they choose so. The loans may not be needed to be repaid, as long as the premiums are covered.

This is a form of permanent life insurance as it acts like a whole life policy by maturing at 100 or until death of the insured. A variable life contract can act as pure insurance and retirement benefit because of the cash value account.

Flex Premium

Many Variable contracts offer flexible premiums. These flex payments allow for skipping premiums or paying in lump sum. As long as the cash value and investment value outperform expenses, flexible premiums will keep the policy in effect.

VUL or Variable Universal Life contracts are permanent life insurance policies that offer death benefits until 100 or life and allow for cash value build up in investment accounts. Universal policies are popular based on their flexible premiums, tax free cash benefits and the ability to borrow off of the variable insurance policy itself.

This is a form of permanent life insurance as it is not temporary insurance like a term policy. A Universal variable life UVL or VUL policy can act as pure insurance and retirement benefit because of the cash value account. The benefit will fluctuate with the values within the account. The insured bears more risk with a VUL as there are investments made into funds within the policy contract account. These investment values will vary with market conditions. Over the long term, these values will normally outperform fixed income or straight insurance policies.

Flex Premium

Many Variable contracts offer flexible premiums. These flex payments allow for skipping premiums or paying in lump sum. As long as the cash value and investment value outperform expenses, flexible premiums will keep the policy in effect.

VUL combines the aspects of tax retirement planning and protection of life insurance and the cash value in the account can potentially grow above and beyond the initial death benefit set on the policy or plan.

Tax Free Growth

As long as the variable insurance plan remains active, the value and growth in the account accumulates tax free. Withdrawels (not loans) are subject to regular income tax distribution.

VUL policies are also used in estate planning for transferring of estate assets to their family.

Charges, Expenses, Fees

Having the flexible premium on variable life plans allows for periodic premium payment or lump some. There must always be enough money in the account to cover any fees and insurance expenses ongoing. Should the cash value and the investments within the VUL perform well enough - many times those charges are covered.

Search Engine Marketing Master Course

403 b plan - 403-b account rules

2009-06-15T14:09:00.000-07:00

A type of retirement account for tax exempt or non profit employees are known as 403b plans. Contributions can be made tax deferred with a portion of salary which is then directed by the employer. These plans must comply with 403 b Regulations
These institutions could include:

Universities
Schools
Foundations
Hospitals

The contribution amounts into this type of retirement plan are made with after tax dollars. 403b plans offer the employee a chance to defer money and have it invested in dedicated mutual funds, tax deferred annuities or other securities.

Retirement Value

As with any retirement account or plan, 403b account holders will have a retirement value based on the contributions they made, the years they were in the plan, and the value of the securities within the 403b account. Diversification of funds and spreading of risk can protect the employee best and allow them to get the highest investment performance and income at retirement.

5500

Beginning in 2009, all ERISA 403 plans must file a full form 5500 that recognizes all assets under the plan. Plans with greater than 100 participants must also meet the 5500 audit requirements and regulations. Contact us below if you have questions on this rule.

Plan Document

A plan document must be in place by the effective date of the regulations. This is an important change. If a 403 b already has a plan document, the retirement plan document must be reviewed to ensure the rules under final regulations are addressed.

Review Operations - Plan sponsors must go over their procedures so they align with what is in their new or existing 403 b plan. The regulations also call for oversight.

Non actively Sponsored Plan

Regulations provide that the account manager review the plan. These still may comply without subjecting them to ERISA. Developing a plan document and reviewing service providers for your 403b plan are included in the regulations compliance.

403b plan regulations

Finance Book Titles

Advisors Selling Fixed IA

2009-03-25T06:45:00.000-07:00

Why Do So Many Advisors Struggle Selling Fixed and Indexed Annuities?

Insurance

Would you agree that the primary advantages of a Fixed Annuity over a CD are that annuities generally provide a higher rate of return, they have better guarantees, and the interest isn’t taxed until it’s used! Then, why is it so hard to convince a CD owner to convert to a fixed annuity?

Would you also agree the primary advantages of an Indexed Annuity over Equity Investments, Managed Accounts and Mutual Funds are that the prospect has the potential to reap the upside of the stock market, without the downside risk to their investment principal. Plus, an Indexed Annuity has a minimum guaranteed interest rate and the returns aren’t taxed until the money is withdrawn. Then, why do advisors have a hard time closing sales for Index Annuities?

There are many reasons why many advisors are having trouble selling Fixed and Indexed Annuities. Part of the problem is most advisors are selling a product, instead of a solution to the prospect’s problems. They are selling features, instead of presenting benefits. Most advisors are NOT making a connection with their prospects. They are NOT building trust and rapport. They are making things too complicated. They are using technical jargon. They are in front of the wrong prospects. And unfortunately, the list goes on and on!

Here are SIX simple solutions that will help you to immediately sell more annuities!

1. You must make sure you are in front of the right prospects for you! Most advisors are focused on attracting high net worth prospects, which puts them in direct competition with every other advisor. Then, they wonder why these prospects want to talk to their Attorney, CPA, Stock Broker, etc. before they make a decision. There are many niches within the annuity markets. You have the low, middle and high net worth people. Within those markets you have pre-retirees and retirees. There are CD owners, mutual fund investors, stock owners, widowed women, annuity owners, tax-free bond owners, IRA owners and the list goes on and on. Each of these niches has a different concern, problem, attitude, likes and dislikes. You have to decide which of these niche markets is right for your expertise, experience, knowledge and products.

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2. You must write and speak at a sixth grade level! Then, even the college professors can understand you! And, you must stop using technical jargon. Most advisors are confusing their prospects by being too technical and going into too much detail. If your prospects are even the slightest bit confused, then why would they want to set an appointment with you, or buy from you?

3. You must build trust and rapport! Whether you are conducting dinner seminars, free educational workshops or just talking to people on the phone, you must be able to demonstrate to your prospects that you truly understand their concerns and their problems. For example, the vast majority of advisors are only getting a 30% appointment rate from their educational workshops and dinner seminars. Then, only 30% of those people are actually keeping their appointments. The main reason for the low appointment rate and the cancellation of appointments is the advisor is not helping the prospect to see how what they are presenting relates to the prospects situation. Most advisors tend to lecture to the prospect. Or, they are trying to educate the prospect. They are not getting the prospect emotionally involved. The advisor is coming across as a sales person instead of an advisor. There is no trust or rapport being created.

4. You must help prospects to identify what their biggest concerns are for themselves! You can’t assume anything. You can’t assume they understand their real problems. You must get them to really talk about their situation and tell you how they feel about what’s happening. You must do a complete, thorough fact-finding interview to help your prospects to truly understand their problems. For example, initially many retirees will tell you that their biggest concern is outliving their money. Yet, when you do a complete, thorough fact-find you might find that they have plenty of money, based on their current life style. Their real problem is they are afraid to take the income they want each year. So, they aren’t able to do the things they really want to do! Or, maybe they are afraid they’ll need long term care and they won’t have enough money to make sure they have choices as to their care. Or, they are afraid their spouse won’t have enough money when they die, because their spouse will lose their pension and social security! Or, they want to make sure they have money to pass onto their children, or a charity.

5. You must really listen to what your prospect is saying! When you’re really listening to someone’s words, you become connected with that person. And, isn’t that the kind of connection that we all want? You can’t sell unless you truly understand your prospect’s problems and what they really want. You must sincerely listen to the prospect, so you can ask the right questions to clarify the prospects current situation and feelings. However, listening is less important than how you listen. By listening in a way that demonstrates understanding and respect, you build rapport with prospects, and that is the true foundation from which you can sell your prospects.

6. You must stay in constant contact with your prospects… and your current clients! It’s a simple rule of marketing, the more you stay in front of people who can do business with you, the more opportunities you have to earn their business. If you don't stay in touch, you'll be forgotten. And, if your clients, prospects, and business associates forget you, then they certainly won't do business with you (or refer people they know to you). Staying in touch is NOT about hounding your prospects and clients until they buy from you. It's about keeping in constant contact with them in positive, non-threatening ways. It’s letting them know what's going on, showing them you care, sending them reminders and providing information that's of value to them.

If you want to sell more annuities, then you must practice the above six simple solutions! These six simple solutions are what we focus on in our systems and with our coaching. It’s why the advisors we work with are able to set appointments with 70-90% of their seminar attendees. And, why these advisors are able to collect a million or more of annuity premiums every month!

By Lew Nason ‘The Nine Out Of Ten Guy’ Claim your free Report "How to Attract & Sell Your Perfect Prospects" at http://www.FastInsuranceSales.comWhere you'll learn how to make 6-figures a year in insurance.

Joint Life Insurance Policy Question - Get Help Joint Insurance

2009-01-13T18:32:00.000-08:00

American Investment Training is the leader in insurance training and assistance for people with life insurance questions and connections to the best companies that offer life policies and others. Free help and questions answered.

We are a New York contract training company for many of the largest insurance carriers in the country specializing in Joint term and life plans to buy. We are licensed insurance agents and we are truly independent. We can contact you and give quotes based on your basic insurance needs. When dealing with an education company, you can be assured of not only getting several quaotes and options, but someone who will explain exactly what your life insurance options are and the best Joint plans to choose from.

We are licensed in New York and most other states. Insurance Questions - Investment Help - Fees, Service Options or any other question:

Joint Life Policy Broker Help

Training company of insurance professionals is available to help with any universal life policy question or other life insurance help.

Universal Life contracts can be confusing as to premium flexibility, cash values, death benefits and viability for retirement planning purposes.

We are professional educators and licensed insurance agents. We provide free policy help.

Tax Sheltered Annuity Plans: 403 (B )Plans

2008-09-11T06:12:00.000-07:00

It is a great feeling to know that you have invested in a retirement program in which you can sit back and relax as you grow older. After working for many years, your desire is not to continue struggling to survive or have someone else take care of you. There are tax sheltered annuity plans, authorized by the IRS 403 (B) code, which are designed for retirement income accounts investing in annuities.
There are substantial benefits of having a tax sheltered annuity. These benefits include not paying on allowable contributions in the year they are made. The contributions of your retirement annuity plans are either excluded or deducted from your income. Another benefit is earning and gains are not taxed until they are withdrawn. And finally, you may be able to take a credit for elective referrals contributed to your account. Only an employer can set up tax sheltered annuity plans.

A portion of your income for retirement can be invested on a pre-tax basis. Among the options of the tax sheltered plans, are mutual funds, in addition to fixed and variable annuities. Enrollment in tax sheltered annuities is very easy. The first thing that you must do is select an investment company that will fit your needs. Second, you will need to contact the company and get an enrollment packet. The last step involved will be to submit a salary reduction agreement to your staffs' benefits office. The salary reduction agreement authorizes the employer to withhold part of your salary from your paycheck. The company you select cannot except your contributions until you open up an account.

Employers who purchase tax sheltered annuity plans enable employees to contribute tax-free dollars to a retirement plan. Annuities are really worth considering because your retirement can be greatly supplemented. In addition to supplementing your retirement, you can also use annuity plans as a back up in case of an un-expected family hardship.

Remember, when money is withdrawn from tax sheltered annuities, it is reported as income for tax purposes. The tax impact is usually not that bad if you withdraw around the age of 65. This is the age when income is usually less. It is a wonderful feeling to know that you have more than just a social security or pension check to look forward to. Source: Annuitiesinc dot com, Louis Zhang

To get a free guide on how annuities work go to www.annuitiesinc.com

Selling Your Life Insurance Policy - Sell Policies

2008-08-26T17:11:00.000-07:00

If you own a term, whole life, variable, universal life or most other life insurance policies, you may be able to sell the issue for a cash settlement.

If you are over age 55 and have a life insurance policy with a face amount of at least $500,000, there is a real secondary market of investors willing to pay cash to policy holders who no longer feel they need the issue.

There are many reasons why someone should explore the cash settlement option to transfer a policy. These transactions are done all of the time.

Selling or transferring a life insurance policy for a cash settlement is a growing market designed to provide a solution for many life policyholders. Viatical or life option transfers are available to people who qualify. There are many reasons why someone may want to sell an insurance policy, get a quote or transfer it for a cash settlement.

Life Option Case Studies - examples of viatical cash settlement amounts

A 75 year old man with term life insurance taken out many years ago was going to let the policy lapse. The insurance was no longer needed for the family protection it was originially intended for. Instead he sold the issue through a life option settlement and received $98,000 cash.

Get a quote and expert help on how to sell your term life or any life insurance for cash.

Any insurance plan can qualify for a quote and cash settlement. These include Term, Universal Life, Variable Universal (VUL) and Whole.

Age - For most settlement quote cases, the age of the insured should be 55 and over. If you are looking to sell a policy or if you are a broker agent contacting us on behalf of a customer looking for a selling option, contact us for a quote on your whole life or other insurance plan.

Get quote on what your policy is worth now. Answer 7 quick questions and see if your policy is worth 5 or 6 figure cash or more right now.

Sell A term Policy For Cash - Learn how you can transfer or sell a life insurance policy. Get a quote for existing convertible term policy holders:

Sell Your Life Insurance Quote

Annuity Funding IRA Death Benefit - IRA Account

2008-07-02T11:34:00.000-07:00

Funding and rollover issues related to annuities and individual retirement accounts (spouse or non spouse)

One of the important annuity benefits relates to its death benefits. Annuities generally provide a death benefit that ensures the IRA owner that, before income benefits begin, his or her estate will receive at death no less than the cumulative contributions made to the plan, less any distributions taken. That provision applies regardless of any asset losses due to investment results. In variable annuities of more recent vintage, this death benefit guarantee has become even more attractive. More recent variable annuities have added a special enhancement to the death benefit by providing a step-up in the minimum death benefit periodically until the contract owner reaches a particular age.

For example, one variable annuity contract provides a step-up in the following way. On the seventh contract anniversary and every seventh subsequent contract anniversary, the minimum guaranteed death benefit is recalculated. The guaranteed death benefit may increase or remain the same as a result of this recalculation; the recalculation will never cause the death benefit to reduce from its previous level. The net result of this recalculation provision is to lock in contract gains, for death benefit purposes, every seven years. Let’s examine the recalculation.

When the contract is purchased, the guaranteed minimum death benefit is equal to the contract owner’s initial purchase payment. The actual death benefit at any time may be greater than the guaranteed minimum death benefit, since it is equal to the greater of the cumulative premium and the current value at death. During the first 7 years, the guaranteed minimum death benefit will increase by any subsequent premium payments and decrease by any withdrawals.

On the seventh contract anniversary, the value of the contract is compared to the minimum death benefit, and the minimum death benefit may be increased. If the value of the contract is lower than the previous minimum death benefit, the guaranteed minimum death benefit stays at its current level. If the value of the contract is higher than the previous minimum death benefit, the guaranteed minimum death benefit is increased to equal the contract value on the recalculation date. This is a benefit that isn’t likely to be replicated in other types of investments.

Nontax Benefit #2: Lifetime Income
The other principal benefit of an annuity is its ability to provide a lifetime income to the IRA owner. An IRA could be invested in something other than an annuity—a mutual fund, for example—during the accumulation phase, and the owner could purchase an annuity at the time of retirement. However, that strategy would cause the IRA owner to lose the possibly more favorable guaranteed annuity rates in the contract at an earlier date. As mortality rates become more favorable over time, life insurance rates generally decline; however, life annuity rates tend to increase.

Since the beginning of the 20th century, mortality rates have improved, so an insurance company’s cost to provide a lifetime income must increase since the income will be paid for a longer period. Continually-improving mortality rates make it easy to see the value in guaranteeing annuity rates. One of the greatest fears among Americans as they near retirement age, according to information from the U.S. Department of Health, Education and Welfare, is the fear of outliving their money. By funding an IRA with an annuity, that fear may be put to rest.

Continuing Education Online

Recommended reading:

Retire Rich With Your Self-Directed IRA: What Your Broker & Banker Don't Want You to Know About Managing Your Own Retirement Investments

Annuity Taxation Surrender Withdrawals

2008-06-18T13:42:00.000-07:00

Annuity taxation and other issues.

Surrenders and Withdrawals

Although annuity contracts owned by natural persons enjoy deferred taxation, the earnings are not tax-free. When the contract’s cash value is distributed, either by surrender of the contract or by withdrawal, any earnings are subject to taxation.

When a deferred annuity contract is surrendered, the cash value in excess of the investment in the contract is taxable as ordinary income. The investment in the contract is normally equal to the premium cost for the annuity; however, certain adjustments may need to be made to the gross premium cost to arrive at the annuity’s premium cost. The extra premiums paid for supplementary benefits must be excluded from the total gross premium to determine the premium cost. Any loan taken from the annuity contract that was included in income should be added to the investment in the contract.

Likewise, when a withdrawal is taken from an annuity contract, the amount of the withdrawal is taxable as ordinary income to the extent it does not exceed the earnings on the contract. This is known as last in, first out (LIFO) tax treatment. For example, suppose that George, a contract owner, had a cost basis in the contract of $50,000 and a cash value of $70,000; the $20,000 difference, of course, would be the contract’s earnings. If George took a withdrawal of $25,000, the first $20,000 taken from the contract would be considered earnings and fully taxable as ordinary income; the remaining $5,000 would be considered a tax-free return of basis.

Premature Withdrawals and Surrenders

Annuities receive favorable tax treatment—a prime example of which is tax-deferral—to encourage savings for retirement. In order to help assure that annuities are used for this purpose and not for short-term investment purposes, the tax code prescribes a tax penalty for premature distributions. The tax penalty for premature distributions is equal to 10 percent of the withdrawal or surrender that is includible in the recipient’s income.

The tax penalty applies to any payment received to the extent the payment is includible in income; however, the tax penalty does not apply to any of the following:

payments made on or after the individual becomes age 59½;
payments attributable to the individual’s becoming disabled;
payments allocable to investment in the contract before august 14, 1982;
payments made on or after the contract owner’s death;
payments made under an immediate annuity contract;
payments made from an employer-purchased annuity upon the termination of a qualified plan; and
payments that are part of a series of substantially equal periodic payments made for the life or life expectancy of the individual or the joint lives or joint life expectancies of the individual and his or her designated beneficiary.
Let’s return to our earlier example of the $25,000 withdrawal taken by George from his deferred annuity. We noted that $20,000 of the withdrawal would be considered taxable earnings, and the remaining $5,000 is a tax-free return of basis. If George is younger than age 59½ and the withdrawal does not meet one of the exceptions just listed, he will be liable for the income tax on the $20,000 taxable withdrawal plus 10 percent of the $20,000 taxable withdrawal. In other words, George would be liable for the income tax on $20,000 of income in his tax bracket plus a tax penalty of $2,000.

Fixed Term Annuity

Multi Year Guarantee Annuities

2008-06-02T07:47:00.000-07:00

A multi-year guarantee annuity, also referred to as a modern annuity, is a fixed annuity on which the current interest rate is guaranteed for a period longer than one year. Although some multi-year guarantee annuities offer a two-year rate period, these contracts generally offer current interest rates for periods of three to ten years. They are designed specifically to appeal to those individuals who might be interested in certificates of deposit.

Multi-year guarantee annuities normally provide contract owners with limited liquidity. Typically, the contract imposes surrender charges for surrenders at any time before the end of the current guaranteed rate period. At the end of the rate period, a 30-day period window applies during which the contract may be surrendered without the imposition of surrender charges. At the conclusion of the 30-day window, the contract is renewed for another multi-year period equal to the previous period unless the owner has surrendered the contract or elected a different renewal period.

During the multi-year guarantee period, surrender charges do not apply when

withdrawals are taken not exceeding credited interest;
the contract owner elects periodic income payments; or
death benefits are paid following the death of the contract owner.
With certain multi-year guarantee annuities, the insurer will combine a bonus feature with a multi-year guarantee by crediting additional interest in the first year of the multi-year period.

In a sense, multi-year guarantee period annuities resemble long term bonds and generally have at least one of their characteristics—market value adjustment. As we know, bonds are affected by prevailing interest rates in the economy and may sell for a premium (i.e., for more than their face amount), or at a discount (i.e., for less than their face), amount depending on the bond’s nominal interest rate compared to prevailing interest rates.

For example, Kyle’s $1,000, 5 percent bond will pay him $50 each year. If the prevailing interest rates in the economy will allow an investor to invest $1,000 and receive $80 in interest each year—8 percent—there probably won’t be many investors willing to pay Kyle the full $1,000 for his bond. Instead, he would probably be able to sell the bond for $625 (or slightly more than that, depending on how far the bond was from maturing for its face amount). This reduction in value is a market value adjustment.

In contrast, the prevailing interest rates in the economy may decline dramatically, and an investor may only be able to obtain 3 percent interest in an alternative investment. In such a case, Kyle’s 5 percent bond is very attractive and may command a price of up to $1,666, depending on when it is scheduled to mature. This increase in value is also a market value adjustment.

Multi-year annuities have similar market value adjustments that apply if the contract owner surrenders the contract before the end of its term. This market value adjustment applies in addition to any applicable surrender charge or premature distribution tax penalty. If the prevailing interest rates in the economy have increased since the annuity was issued, the market value adjustment is almost certain to be a negative one, and the applicable surrender charge on top of that market value adjustment could result in an expensive surrender. Alternatively, if the interest rates in the economy have declined since the annuity was purchased, the market value adjustment is likely to be positive and will offset, to some extent, the applicable surrender charge. Unfortunately, the bulk of surrenders are done in response to the contract owner’s desire to chase higher interest rates. For that reason, the market value adjustment is most likely to be negative.

Annuity Investments

Bonus Annuities - Bonus Contracts

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A bonus annuity is a deferred annuity on which the first-year interest-crediting rate is greater than the current rate that the insurer anticipates it will credit in subsequent years. The difference in these rates is the “bonus.”

The bonus offered by insurers selling bonus annuities may range anywhere from 1.5 percent to as high as 5 percent. Although some insurers may inflate the “bonus” that they credit and then credit below-market interest rates in renewal years in order to recover the bonus, this barely-ethical approach is certainly not the norm. However, before recommending a bonus annuity to a customer, the financial practitioner is advised to review the renewal interest-crediting rate history of the insurer.

Bonus annuities can facilitate the movement of funds from other savings and investment vehicles. This bonus, credited in the first year, may motivate a customer to transfer funds to the annuity that he or she might be otherwise reluctant to transfer because of

surrender charges,
CD penalties,
stock and bond losses,
mutual fund losses,
transaction costs, and
tax liability.

In certain bonus annuities, there may be strings attached to obtaining the higher first-year interest rate. For example, the contract owner may be able to receive the higher interest-crediting rate only if he or she makes no withdrawals from the contract, other than earnings, for a specified time period. Other bonus annuities may credit the higher first-year rate only if the contract is annuitized. Still other bonus annuities may require that the contract be maintained for a prolonged period in order to receive the “bonus.”

These conditions don’t necessarily mean that the contract is an undesirable one or one that is unsuitable for a customer. They are, however, factors that should be considered before making a recommendation.

For questions on annuities and all insurance and investment assistance from trained experts, contact American Investment Training's Retirement Plan Help form

Fixed Renewal Rate

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Factors affecting fixed annuity renewal rates can be a source of confusion for clients.

Here are answers to some common questions you can use to help them understand
more about their annuity and what influences renewal rates.

An important factor influencing renewal rates is the yield we earn on the investments we hold in our portfolio supporting your annuity. Life, like other insurance companies, holds medium and longer-term investments (meaning 3 to 7 years). These investments have varying maturity dates, and typically do not mature for a few years.

For this reason, there can be a delay of a few years before general trends in interest rates may be reflected in our portfolio and in our renewal rates. Although we cannot project what our renewal rates will be in the future, they historically fluctuate more in line with long-term movements in the 5-year U.S. Treasury Rate – meaning an average over a few years, and not a single point in time.
Year-to-year changes in the 5-year U.S. Treasury Rate, or any other interest rate measure, will not necessarily generate similar year-to-year changes in your contract’s renewal rates.

Annuity renewal rates are not directly indexed to changes in any particular
market interest rate.

Currently, it is likely that the first renewal rate will be close to, and perhaps equal to, thebase interest rate earned in the first contract year.

Fixed and Variable Annuities

Fixed Income Annuity

Fixed Annuity Tax Yield

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Annuities are tax-deferred. When you take that into account, the
net rate of return from an annuity may, in fact, be higher than what a taxable investment provides. This is because you do not pay taxes on the earnings until you make a withdrawal, thus having the potential to make money faster than with comparable taxable investments.

Annuities offered by financially strong insurers also afford investor
protection. State laws regulate the insurance business. Insurers must hold reserves to protect money paid in by policy owners. Life consistently receives high ratings from the major ratings firms: Moody’s Investor’s Service, Standard & Poor’s Corporation, A.M. Best Company, and Fitch.1
Tax-Deferred
Rate of Return
(100 – Tax Rate)
5% Tax-Deferred
Rate of Return
(100 – 25%
Tax Rate)
= 6.6% Tax
Equivalent Yield
= Tax Equivalent
Yield

Annuities should be purchased as a long-term investment.
However, you always have access to the free surrender amount without any
surrender charges.2
Plus, investors don’t lock into a long-term rate. The initial rate on many fixed
annuities is guaranteed for one year. After that, the rate is reset (renewed) annually based on various factors, including market conditions.
Historically, Life fixed annuity renewal rates have been very attractive.

There are several different types of interest rates, such as short term
rates, long-term rates, etc. The Federal Reserve can more directly influence
short-term interest rates that are guaranteed for less than six months.
Most annuities, however, are tied to long-term interest rates. This is because
insurance companies are more likely to invest in asset classes like long-term
duration bonds and mortgages.

A high rating by a particular firm does not constitute an endorsement of the rated insurer by the ratings firm.

You should consult with appropriate counsel
or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

Tax-qualified retirement arrangements, such as IRAs, SEPs, and SIMPLE-IRAs are tax-deferred. You derive no additional benefit from the tax deferral feature of the annuity. Consequently, an annuity should be used to fund an IRA, or other tax
qualified retirement arrangement, to benefit from the annuity’s features other than tax deferral. These features may include guaranteed lifetime income, guaranteed minimum interest rates, and death benefits without surrender charges.

Fixed Annuities

New York Annuity Policy

Guaranteed Interest Rate Annuity

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Guaranteed Interest Rate
The initial premium earns an initial base interest rate that is guaranteed for one year. If no other premiums are paid in the first contract year, the renewal rate for the second contract year is guaranteed to be no less than the initial base rate.

For example, assume:

A single premium interest payment.

Initial base interest rate is 3.25%.

If no other premiums are paid in contract year one, the contract year two renewal rate is guaranteed to be no less than 3.25%

If additional premium payments are made in contract year one, a dollar weighted average crediting renewal rate would be calculated at the beginning of the second contract year. This renewal rate would never be less than the guaranteed minimum interest rate stated in the contract.

Beginning in contract year three, and each year thereafter, the accumulated value is guaranteed to grow at a renewal rate no less than the guaranteed minimum interest rate stated in the contract.

Annuity Rate

Fixed Annuity Quote

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Insurance agents and full service financial firms offer quotes on fixed indexed annuity product. Either the agent works for the insurance company itself or they are agents of an annuity company.

These products are offered on the primary market and normally carry a sales charge for purchases and each plan is different, so the quotes on these products will differ as well.

Quotes could be based on whether it is a single fixed annuity, joint or last survivor. The age and benefits will effect the rate of return and the quote.

There are also discounts on sales charge amounts that could be built into the quote based on dollar amounts committed to on the annuity and the size of the contract. The prices on these investments are set daily based on the value of the securities held in the general account.

Fixed products could be bought periodically over time or more bulk.

As with all investment, but most so with retirement annuities - the quote should be part of your decision, but the overall suitability of the product should be the main factor.

http://www.brokerjobs.com/glossary.htm

Fixed Annuity

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Fixed Indexed Annuities are insurance products that pay a fixed rate of return to an investor or policy holder.

Money is invested by the individual and placed in the general account of the insurance company. The annuity proceeds are invested in fixed income securities. These securities are normally bonds or other fixed products. The rate of interest that is paid to customers is indexed off of the projected rate of return gained by the insurance company.

The money that is contributed is known as the accumulation phase or accumulation unit phase. This money is used to purchase these units over time. The annuity product will grow in units and the fixed payout will be based off of the growth of the account and the rate of return paid.

When the payout period begins, it is based off of a fixed number of annuity units.

http://www.aitraining.com/annuity.htm