How To Maximize An Annuity's Death Benefit

Even the best financial plans can run into unforeseen problems with taxation that could leave your heirs with less than you plan. However, by using life insurance to maximize your annuity funds, you could provide your loved ones with more value for your annuity funds without the limitations of income or estate taxes.

Who Can Benefit?
You may have used annuities as a savings vehicle for your financial plan. However, now you may find that you no longer need the income in the annuity and want to leave it to your heirs.

But did you know that the gains on your annuity (the portion that exceeds your original premium) could be taxable income to your heirs? In addition, your annuity's total value is included in your taxable estate, which could result in a diminished inheritance.

One strategy to maximize your annuity dollars is to purchase a life insurance policy on your life with the annuity funds. The beneficiaries of the policy would then receive a generally tax-free death benefit.

Why Life Insurance?
Life insurance provides a generally income tax-free death benefit and can be structured to be excluded from your taxable estate. In addition, using your annuity to buy a life insurance policy can maximize the value for your heirs.

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