Americo Financial Life and Annuity Insurance Company
 
Learn the Basics
about Wealth Transfer

 


Wealth transfer planning can be as simple as repositioning an asset such as cash in a bank account, CD, annuity, or other similar asset for a single premium life insurance plan. Why? Because, generally speaking, life insurance may produce a significantly better financial result for your beneficiaries.

 
CDs
and other bank products
Annuities
Lifetime Legacy
Safety
Liquidity 1
Avoids Probate
I 2
Tax deferral
_
Guaranteed minimum death benefit 3    
Accelerated benefit for permanent nursing home confinement or qualifying terminal illness 4    
Lifetime Legacy is life insurance. It is not a deposit, is not guaranteed by a bank, is not FDIC insured, nor insured by any other federal government agency.

 

 

 

 

 

 

 




Certificates of Deposit (CDs) and other bank products are safe and accessible. They are typically insured by the Federal Deposit Insurance Corporation (FDIC). CDs and other bank products have a relatively high degree of liquidity. Withdrawals or distributions from these products may result in early withdrawal charges. All interest earned is subject to income tax every year whether you withdraw it or not. Plus, at your death, there may be significant delays and expenses due to probate that can reduce the total amount passed on to your heirs.
Annuities are a popular alternative to traditional bank products and CDs. Annuities are backed by the financial strength of the issuing insurance company. They are not guaranteed by any bank, nor are they FDIC insured or insured by any other federal government agency. States do have guaranty associations in the event the insurer becomes insolvent. Annuities have a moderately high degree of liquidity. Withdrawals or distributions from annuities may result in surrender charges and may have tax consequences and tax penalties. Growth in an annuity is tax-deferred. However, you will pay taxes on the gain if you take a withdrawal. At your death, your heirs will pay income taxes on the gain at their tax rate, which may be substantially higher than yours.
Lifetime Legacy provides the unique tax advantages of life insurance. A single premium5 purchases an initial guaranteed minimum death benefit that is, in many cases, substantially greater than the single premium you paid, and it generally passes to your beneficiaries income tax-free and outside of probate. Lifetime Legacy offers a lifetime guaranteed minimum death benefit that will never change unless you take a policy loan, a withdrawal, or an accelerated benefit for permanent nursing home confinement or a qualifying terminal illness. It provides moderate liquidity through the policy's loan and withdrawal privileges. Loans are available after the first policy year. Withdrawals are available after the 5th policy year6. All earnings grow income tax deferred until withdrawn.

Neither Americo Financial Life and Annuity Insurance Company nor any agent representing Americo Financial Life and Annuity Insurance Company is authorized to give legal or tax advice. Your client should consult a qualified, professional legal or tax advisor regarding the information and concepts contained in this material.

1 Liquidity is the ability to quickly convert an asset to cash.
2 The treatment of bank products in probate depends on how the particular product is titled.
3 The guaranteed minimum death benefit will never change, assuming no loans, withdrawals or accelerations of the death benefit have been taken.
4 Accelerated Benefit Payment Rider (Rider Series 2149). Benefits may vary by state and may not be available in all states. Certain limitations and exclusions apply. The permanent nursing home benefit is payable after a 90-day elimination period from the time confinement begins. Because accelerated benefit payments are treated as liens against the policy, interest will apply and will gradually decrease the amount of proceeds payable over time.
5 The Technical and Miscellaneous Revenue Act of 1988 (TAMRA) created a class of life insurance policies called Modified Endowment Contracts (MEC). Generally, a life insurance policy is a MEC if the policy is purchased with a single premium or premium payments which exceed the limits prescribed by this law. Most Lifetime Legacy policies become or are issued as MECs. Be advised that policy loans, withdrawals, assignments, and surrenders will be taxed as income to the extent there is gain in the contract. There is gain in the contract if the cash values exceed the cost basis in the policy (generally the premiums paid). In addition, you must pay a 10% tax penalty on the taxable portion of any policy loan, withdrawal, assignment, or surrender made by you before age 59½. This information is merely a summary of the Internal Revenue Code rules which govern life insurance policies. As with all tax matters, consult a professional tax advisor.
6 Policy loans and withdrawals will impact policy performance and the ability to take future distributions. Any distribution of gain may be subject to taxes and IRS early distribution penalties if taken prior to age 59½.
 

Lifetime Legacy

Wealth Transfer

See Wealth Transfer in action

 

Explore these options:

Education | Wealth Transfer | Annuity Basics | Life Insurance Basics | Glossary | Needs Analysis

 

 

Americo Financial Life and Annuity Insurance Company is authorized to conduct the business of insurance in the District of Columbia and all states except AK, NY, and VT.