Wealth Transfer

You've worked hard. You've saved and prepared for a bright future without financial worries. Part of your preparation was buying your tax-deferred annuity.

The taxes are deferred, but eventually someone—either you or your family—will have to pay income taxes on these earnings. You'll pay taxes if you and your spouse elect to receive your annuity income for life.*

The good news is that if you and your spouse won't need your annuity payments, you can use universal life to transfer this wealth to your family—without burdening them with income taxes. An annuity is a great tool to accumulate money, but it's not the best way to transfer wealth. If you elect not to receive your annuity payments because you and your spouse won't need them, you can transfer this wealth to your family:

1. Death benefits from an annuity are fully taxable, to the extent of the gain, to the beneficiary. This will likely reduce their net inheritance.
2. If you qualify, you can use the annuity to buy a Beneficial Financial Group universal life policy, with your family as beneficiaries. You'll pay taxes on the annuity proceeds now, but your family won't pay taxes on the universal life proceeds. By paying taxes on a smaller amount now, you may be able to actually pass along more to your family. Their net inheritance will likely be larger.

*The IRS will assess a 10 percent tax penalty if you withdraw gains from your tax-deferred annuity before age 59½ (limited exceptions apply). Any income you receive from your tax-deferred annuity that represent gain will be taxed as ordinary income.