Gen X – Get Ready for Inherited Annuities and LTC Hybrids-Slide handout

Slide handout

Pdf Summary

The presentation "Assessing Your Insurance Policies: Optimal Protection" by Mark Maurer, CEO of LLIS, was tailored to the Generation X audience, comprising about 65 million people in the USA. The presentation focuses on understanding wealth transfer through inherited annuities and highlights several financial strategies for managing annuities.<br /><br />The discussion focused primarily on Cynthia’s non-qualified annuity, which accrued $1.28 million in taxable gains over its cost basis. Her four daughters were named as beneficiaries, each entitled to 25% of the annuity value. Upon Cynthia's passing, her daughters have several options: taking a lump sum, withdrawing over five years, or annuitizing over their lifetime. Each choice involves different tax implications and financial considerations, such as ordinary income taxation on gains and the sequencing of withdrawals (LIFO).<br /><br />For instance, Ginger opted for a lump-sum payment, making $320,000 in gains subject to immediate taxation. Alternatives include spreading withdrawals or annuitizing, which offer benefits such as fixed, predictable income and potential tax benefits, albeit with delays in accessing the tax-free basis portion.<br /><br />The presentation also compared hybrid life insurance policies, emphasizing long-term care (LTC) benefits with options like Hybrid Life, providing either LTC or death benefits. Options differ in terms of benefit periods and inflation protection. The session included a case study involving Phil and Kate, highlighting potential premiums and benefits based on their LTC and death benefit priorities.<br /><br />The segment concluded with a focus on joint hybrid life policies, offering shared benefits for spouses, emphasizing flexibility, tax efficiency, and growth potential in hybrid annuity structures. Participants were encouraged to consider tax implications and options best suited to their financial goals.

Keywords

insurance policies

Generation X

wealth transfer

inherited annuities

tax implications

hybrid life insurance

long-term care

financial strategies

tax efficiency

annuity management