Life Insurance IRA Roll Over

[eersfan]

You won't earn an insurance commission doing a roll-over to a self-directed IRA, no.

You can roll it over into an IRA and use the IRA to purchase an annuity and you would be paid that commission.

You cannot roll over to life insurance without making it a taxable distribution - subject to income taxation and penalties. If it's large enough, you may want to consider doing 72(t) distributions until age 59 1/2 and use each distribution to purchase life insurance... but I wouldn't recommend doing that yourself. Get some expert help from a quality IMO. (No, I'm not an IMO.)

A couple of years ago, I had the sister of a client ask me to help her with a life policy she purchased from an American General agent 10 years earlier. Turns out, the AG agent rolled a profit sharing check into a single-premium UL contract, and this lady received a 1099 for a withdrawal and didn't understand why. What a mess!

I called an AG District Manager I know and asked him for some help. He looked at it and said it never should have made it through their process. In the end, AG refunded all of the money AND paid the income tax (refunded the tax paid) on the withdrawal. I'm not a big fan of AG, but they did the right thing for this lady...and they fired the agent.