Case Study – Annuity Arbitrage & Split Annuities

Annuity Arbitrage

Annuity Arbitrage delivers additional income while adding flexibility to a client’s estate plan.  Our short video below shows how you can create lifetime income and replace the money used for the single premium immediate annuity with life insurance.  Adding a long-term care or chronic illness rider allows tax-free, dollar-for-dollar, access to the death benefit if needed for care.  Any remaining death benefit not used for care is paid to the named beneficiary. 

Split Annuity

If Ingrid is only looking to maximize income, we can split the assets into a Single Premium Immediate Annuity (SPIA) and a Deferred Income Annuity (DIA).  In our example, the SPIA will pay income for 14 years.  When the SPIA ends, the DIA will start paying a lifetime income starting in year 15.

Guaranteed Lifetime Income Options

Annuity ALIRT Report

I found this recent ALIRT report very informative.  When looking for guaranteed lifetime income, don’t underestimate the importance of working with a high-quality carrier.  More carriers are privately owned and some are reinsuring offshore.   

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