90 Year Old Women

[FL P&C Broker]

I apologize for my ignorance regarding annuities I am not licensed yet but my dad is and he is trying to figure out a way to help my grandmother but he doesn't deal with annuities on a regular basis.

She is 90, has a $171k Allianz annuity that she bought almost 5 years ago, the beneficiary of the annuities can only receive yearly payment for a minimum of 5 years once she dies. If she cashed it out early she would receive about 12k less than what she bought it for. I am not sure if she didn't realize when she bought it but she or nobody else is very fond of the 5 year deal. Is there anything she can do?

She also has 80k in a money market, we are trying to reduce the tax burden. Is there anything she can do at all? Is it at all possible for a 90 year old women to purchase a single premium annuity? I don't think there is anyway but figured I would ask.

Thanks for any help.

 

[insuranceexec]

What product did she purchase from Allianz? I assume you are referring to the Masterdex 10.

I would also be reluctant to have her cash this in as there have been some nice gains in her contract; and with the aforementioned product, her gains are greatly reduced for an early surrender.

I would need some other information like:

current income
total net worth
total liquid net worth
overall objection
a break down of her current holdings

before I could give you a good opinion. I hope this helps.......

 

[arnguy]

IMO the 5 year payout to the beneficiary is advantageous to the benficiary, The IRS allows a 5 year payout of the annuity porceeds to the beneficiary to spread the tax burden over that period instead of being with a one-time taxable event. The proceeds of an annuity are not income tax free as is the case with a life insurance policy.

I think insuranceexec will concur with the above statement.

 

[InsureGuy5]

In reality, she may be stuck with the Allianz product until maturity. The 5x5 payout is reflective of some of their older products.

In some cases, we have helped people with internal transfers to newer products that allow for a lump sum withdrawal that is surrender free.

An yes, there are annuity companies offering accounts to those that are age 90 and above. Feel free to contact me and I can tell you more. [email protected]

 

[insuranceexec]

IMO the 5 year payout to the beneficiary is advantageous to the benficiary, The IRS allows a 5 year payout of the annuity porceeds to the beneficiary to spread the tax burden over that period instead of being with a one-time taxable event. The proceeds of an annuity are not income tax free as is the case with a life insurance policy.

I think insuranceexec will concur with the above statement.

Arnie I do agree. Most people look at the DB payouts as a drawback; where as I, and yourself, see them as an advantage.

The problem with this method is that Allianz does not pay any interest on the money that is kept during the payout; but when you factor in the tax savings, in most cases it is a wash. Very good point!

As insureguy has stated there are a number of companies and products including Beneficial Financial that will write a 90 year old; but it comes back to suitability. Good question!

 

[FL P&C Broker]

I guess i should ask another question then, if she passes on the 80k in a CD or money market the whole thing would be taxable, correct? What if she was to pass it on as an annuity, wouldn't only the interest be taxable?

 

[insuranceexec]

I guess i should ask another question then, if she passes on the 80k in a CD or money market the whole thing would be taxable, correct? What if she was to pass it on as an annuity, wouldn't only the interest be taxable?

Is the CD qualified or non-qualified money?

 

[FL P&C Broker]

We are not really concerned with the CDs, it is 80k in the money market she is concerned with.

 

[insuranceexec]

We are not really concerned with the CDs, it is 80k in the money market she is concerned with.

Well; is that money qualified or non-qualified?

 

[FL P&C Broker]

It was from the sale of securities so I am guessing non-qualified.