NQ Transfer Annuity to SPWL

[ScottLFB]

I have an individual that I'm talking to about single premium life. They have an indexed annuity that is NQ and has had it for about 8 years. We have been discussing transferring the annuity to a single premium life policy. So, in doing my own research on what kind of taxation is involved in this type of transfer I'm unsure on some things. Seems every where I've looked you don't really get an exact answer.

Will the gain be taxed as normal income under current tax bracket AND capital gains tax? Gain, taxed as normal income only or capital gain tax only?

Here is the details: Annuity surrender value is $111,000 and the amount on inception is $86,000. Looking to transfer the $111k into a spwl policy which would create $155k. Tax bracket is 10-15%. Capital gains tax could be 0%

What, if any, tax consequences would this person have in this scenario?

You can do the 1035 exchange. But you should get quotes to see if it's more beneficial for the client to take the tax hit all in one year (include his possible increased tax bracket on his other income because of this) Versus using 1 of the few SPWL products that have the short Term SPIA built into the front end of them to help spread out that tax liability so it doesn't all hit in the same year.

I know a guy that works with these products... If I could only remember his contact information..

 

[mhutch]

Does anyone know what the Equitrust Market Twelve annuity street level commission is?

Second question, Columbus Life, great UL company here in Missouri. Does anyone know what their street level commission is on their UL's?

Again I'm in Missouri.

 

[Todd King]

Does anyone know what the Equitrust Market Twelve annuity street level commission is?

Second question, Columbus Life, great UL company here in Missouri. Does anyone know what their street level commission is on their UL's?

Again I'm in Missouri.

My annuity commission schedules may be a little old, but MGA should be the street level and as of the schedule dated 08/15 it was 8.5%. I'm sure it's dropped a little since then though.

 

[Golfnut2112]

I deal direct with Columbus life and get 90% plus bonuses. You do not need an IMO for Columbus life.

 

[mhutch]

I found a company brochure advertising the 8.5% commission but was also dated back in 15'. I've found nothing that shows their recent commission levels on their products. Maybe they're the same still but I'm trying to find that out, if they have changed at all.