When Should Your Client's Pay Taxes?

Let me pose a question to you: Given the choice of how your saved or invested money is taxed, what would be your preferred scenario? Pay taxes now, pay later, or not pay at all?

I'm sure you would rather avoid paying Federal Income Tax, and I feel the same way. I’m also certain that your clients share this sentiment. So, why don’t we assist them? Why don’t we give them what they want? You know we can help. Let me explain.

Many seniors invest in annuities for accumulation purposes, not necessarily for immediate income. However, they may be concerned about providing for their "surviving spouse" after their passing. What they may not realize is that there is a solution: Single Premium Life.

Before you dismiss the idea, hear me out. You likely have clients with "Declared Rate" annuities earning a 3% Guaranteed Rate. Why not surrender a portion—or in many cases, all—of the annuities and invest the money in a single premium life policy? You can opt for the full underwriting version or simplified issue. Yes, there will be taxes on their gains. But does that really matter when we consider the alternative?

For instance, consider one of our agents who had a 65-year-old female client with approximately $100,000 in an annuity. Her cost basis was around $89,000. She wanted to leave her money to her grandkids. So, we liquidated the policy, paid taxes on $11,000, and turned her $100,000 into $181,000.

This is a simplified issue policy—no exams required. Furthermore, it would provide $3,600 per month for nursing home care and $1,800 for home health care. If this were a male seeking to leave money to a surviving spouse, the death benefit would be approximately $150,000.

Here’s the question—how long would it take for the lady to grow $100,000 to $180,000 at rates of 3%, 4%, or 5%, factoring in taxes? This market is thriving!

We have the sales and marketing materials to support you. Help your clients increase their estates with a tax-free death benefit. It’s the right move to make.

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Until next time… good selling!
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Raymond J. Ohlson
Founder & Retired CEO
Ohlson Group
​1-877-844-0900