Medicare Friendly Income Products: Anuities and Financial Security in Retirement

Services for Real Estate Pros with Pillar Financial Corporation

Medicare Friendly Income Products


What is an annuity?


Annuity ... from the medieval Latin "Annuitas," meaning "yearly payment." An annuity is an agreement between an individual and an insurance company. An individual pays some amount of money (referred to as a "premium") to an insurance company, which the company later pays back under an agreed-to payment schedule.

One method of receiving income might be a lump sum payment; another might be a guaranteed income to last at least as long as the annuitant lives. Most annuities have a deferral period (the period prior to the time income payments begin). During this deferral period the interest earned on the annuity is free from income tax until withdrawn.


How does an annuity help provide financial security in retirement?

Just a heartbeat ago, the average worker could not expect to live more than a few years past age 65, the normal retirement age. Now any healthy person may reasonably expect to live into his or her late seventies or eighties. Many people still face an uncertain financial future when their regular stream of income stops. Purchasing an annuity to guarantee a regular retirement income can be a highly satisfactory solution.


Single Premium Immediate Annuity Products

Standard Life of Indiana offers two great Single Premium Immediate Annuities: SPIATM and SPIA+TM.


Single Premium Immediate Annuities (SPIA) are purchased with a single lump sum investment of funds. The source of the funds might be life insurance proceeds, an inheritance, a one-time sale of assets, the sale of a business, a distribution from another annuity, or a distribution from a retirement plan. Income generally begins under an SPIA one payment period after the single premium has been paid and the annuity is issued. Income may be deferred under an SPIA, but if it is, the contract usually cannot be surrendered for its cash value, as is possible with deferred annuities.

SPIA's may generally be purchased to pay income on a monthly, quarterly, semi-annual or annual basis. This means that the first income payment will generally occur one month, three months, six months, or one year after issue.



With the Select Annuity, the client has the satisfaction of knowing they are earning the highest possible yield, consistent with safety. The initial interest rate is guaranteed for a period as stated on the specifications page of the contract. On each anniversary your client will receive a complete accounting detailing their contributions and their account value.

The Select Annuity has tax-deferred income for the rest of your client's life, you can only get this from Standard Life!


Saver's 5, 6, 7, 8, 9, or 10TM

A traditional fixed annuity with a fixed year term -- plus a bailout provision. If your renewal rate falls below the safety withdrawal rate (bailout), you may withdraw your entire account value penalty free


Value PlusTM

Traditional annuities offer tax-deferred accumulations and tax-favored income for the rest of the policyholder's life. Traditional annuities bring the satisfaction of earning the highest possible interest rate - consistent with safety.

Value PlusTM: The first tax-deferred annuity to offer a re-entry provision. The re-entry provision allows clients, at the end of the fifth year, and every four years thereafter to "re-enter", or start all over, with current first year bonus and base rates. In addition, the ValuePlus annuity offers both regular and Medicaid-friendly annuitization options at the end of the first contact year.


Guaranteed Five: Overview

Since 1934, Standard Life has been serving people just like your clients all over America. And we're proud to say that our annuity programs are some of the finest you'll find.

With the Guaranteed Rate Annuity, you'll have the satisfaction of knowing that the client is earning the highest possible yield, consistent with safety, on 100% of your initial contributions. Your yield will be guaranteed for the period specified on the contract.

This product is a single premium, tax deferred annuity with a long term interest guarantee and market value adjustment


Equity Income Plus: Overview


The Equity IncomeTM Plus Annuity is a traditional tax-deferred annuity that will offer you stock market-linked returns with none of the losses...and a 10% annuitization bonus.


At the end of each month after the annuity is issued, and with each subsequent payment, we record the value of the Standard & Poor's® 500 Index. On each one-year anniversary of the policyholder's Equity IncomeTM Plus payment, we compare the average of the 12 monthly values to the value of the S&P 500 Index at the beginning of the payment year. Then the percentage of change is multiplied by the participation rate in effect for the annuity. The resulting percentage rate is the annual interest rate applied to the value of the annuity for the year.


Remember, the Equity IncomeTM Plus Annuity averages its return over the course of a policy year. In a volatile market, averaging may tend to produce higher index increases if the index has risen and fallen substantially between measuring points. This, along with strong guarantees (114% if held for the full 10-year term, assuming no withdrawals), and a guaranteed participation rate make the Equity IncomeTM Plus the product of choice for many financial planners.


For individuals desiring a lifetime income, the Equity IncomeTM Plus will credit them with a 10% annuitization bonus (based on their initial deposit).


The Equity IncomeTM Plus Annuity credits interest once a year at a guaranteed rate of 100% of that year's growth in the monthly average of the Standard & Poor's® 500 Index, less an index adjustment and subject to a maximum rate stated in the contract.


If the S&P 500 Index declines in any given year, the principal and all previous gains are locked in, as along as no withdrawals have been taken.


"A tremendous product to compliment other retirement income."

What are you really earning?

When it comes to interest rates, do you calculate the effects of income taxes?

Taxable investments, like Certificates of Deposit, post their current interest rates without the effect of income taxes.

After - Tax Yields can be significantly less than advertised.


Tax-deferred vehicles, like Annuities, are credited with 100% of their yield because you don't have to pay income tax on annuities until you withdraw the money.


Ted Lewicki can help with all your insurance and financial planning needs. Visit more information and details about his special Family Care Package and Senior Care Package.


Servicing:  Oakland County, Addison Township, Auburn Hills, Berkley, Beverly Hills, Bingham Farms, Birmingham, Bloomfield Township, Clawson, Commerce Township, Farmington, Farmington Hills, Ferndale, Franklin, Hazel Park, Highland Township, Holly, Holly Township, Huntington Woods, Independence Township, Keego Harbor, Lathrup Village, Lyon Township, Madison Heights, Milford, Milford Township, Northville, Novi, Oak Park, Oakland Township, Orchard Lake, Orion Township, Oxford Township, Pleasant Ridge, Pontiac, Rochester, Rochester Hills, Royal Oak,
Southfield, South Lyon, Troy, Walled Lake, Waterford Township, West Bloomfield Township, White Lake Township, Wixom


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