The one and only Stan The Annuity Man (a legend!)... anyway, recently found your new channel and insta-subscribed ... and will thumb-up any videos I watch, including this one. Thank you so much for your integrity and tireless effort over all these years... If ai ever need an annuity, I will definitely come to you. Please don’t sell out!
As I understand it...if you have an and you are taking the income, the remaining principal invested in the annuity remains YOUR money, even after the income stream has started. As Stan said, if you decide to stop the income stream for a period of time, you can. And then you can choose to restart it later. With an income annuity, you continue to have a surrender value. If you have a and income is being paid out, you no longer own the principal, and you cannot control the income stream any longer. And unless your contract allows for conversion, you do not have the option to "change your mind" and "get your money back."
Hmm, I listened but still don't understand the Lifetime income benefit rider. Why would anyone select it? Does it allow the beneficiary to stop the income stream, hence retain principal?
An Income Rider may be a good alternative for someone who doesn't have a definite date they want to turn on income. Income can be turned on and off. Additionally in some cases an income rider will guarantee a higher lifetime income amount than a DIA. Any remaining principal will be paid to the beneficiaries upon death. When quoting future income we quote both income rider and DIAs to show all options.
@@StanTheAnnuityMan That not only makes sense, it would be helpful. I appreciate your response, Stan. I'm looking to buy QLACs in a few years, providing a stream of income plumped up with mortality credits. However, I might not want nor need the income. I might be pushed into a Social Security tax torpedo, unless I had a faucet to turn off the payments when I don't want them. QLACs seem inflexible in that regard. You mentioned that a beneficiary other than me could get the income stream, a fine feature that QLACs don't have. OTOH, QLACs pay as much as they do because the company keeps the remainder when I die, hence mortality credits for me but not for beneficiaries. My guess is that non-QLAC annuities with beneficiaries pay less.
A QLAC can be structured on your life only (highest payout) or your life with a cash refund, which will pay any remaining premium to your beneficiary upon your death. You can also set up income based on your and your spouse's life with the same options, Joint Life Only or Joint Life with Cash Refund. Obviously if the insurance company is promising to return premium the income will be lower than a life or joint life only option.
Is the exclusion ratio constant with each payment or does it vary over time? Obviously the exclusion will be zero when all of the principal has been payed out.
@@ericshubert2007 The ratio is calculated when the payment is calculated. So if you are purchasing a SPIA, you would have the number on the illustration. If you are annuitizing an annuity, they would tell you when the calculate the payment.
The one and only Stan The Annuity Man (a legend!)... anyway, recently found your new channel and insta-subscribed ... and will thumb-up any videos I watch, including this one.
Thank you so much for your integrity and tireless effort over all these years... If ai ever need an annuity, I will definitely come to you. Please don’t sell out!
As I understand it...if you have an and you are taking the income, the remaining principal invested in the annuity remains YOUR money, even after the income stream has started. As Stan said, if you decide to stop the income stream for a period of time, you can. And then you can choose to restart it later. With an income annuity, you continue to have a surrender value.
If you have a and income is being paid out, you no longer own the principal, and you cannot control the income stream any longer. And unless your contract allows for conversion, you do not have the option to "change your mind" and "get your money back."
Hmm, I listened but still don't understand the Lifetime income benefit rider. Why would anyone select it? Does it allow the beneficiary to stop the income stream, hence retain principal?
An Income Rider may be a good alternative for someone who doesn't have a definite date they want to turn on income. Income can be turned on and off. Additionally in some cases an income rider will guarantee a higher lifetime income amount than a DIA. Any remaining principal will be paid to the beneficiaries upon death. When quoting future income we quote both income rider and DIAs to show all options.
@@StanTheAnnuityMan That not only makes sense, it would be helpful. I appreciate your response, Stan. I'm looking to buy QLACs in a few years, providing a stream of income plumped up with mortality credits. However, I might not want nor need the income. I might be pushed into a Social Security tax torpedo, unless I had a faucet to turn off the payments when I don't want them. QLACs seem inflexible in that regard. You mentioned that a beneficiary other than me could get the income stream, a fine feature that QLACs don't have. OTOH, QLACs pay as much as they do because the company keeps the remainder when I die, hence mortality credits for me but not for beneficiaries. My guess is that non-QLAC annuities with beneficiaries pay less.
A QLAC can be structured on your life only (highest payout) or your life with a cash refund, which will pay any remaining premium to your beneficiary upon your death. You can also set up income based on your and your spouse's life with the same options, Joint Life Only or Joint Life with Cash Refund. Obviously if the insurance company is promising to return premium the income will be lower than a life or joint life only option.
Is the exclusion ratio constant with each payment or does it vary over time? Obviously the exclusion will be zero when all of the principal has been payed out.
The exclusion ratio is fixed. You are correct in that once the principal has been paid out the income is fully taxable.
@@StanTheAnnuityMan At what point (hopefully before payments begin) can the ratio be determined? I'd like to know for tax planning purposes.
@@ericshubert2007 The ratio is calculated when the payment is calculated. So if you are purchasing a SPIA, you would have the number on the illustration. If you are annuitizing an annuity, they would tell you when the calculate the payment.