| "Can death benefits riders drain variable annuity retur |
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lgreenberg
New Member
Cash: $ 1.25
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| "Can death benefits riders drain variable annuity retur |
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Fact: There are simple variable annuities that offer a basic death benefit at no extra charge.
A basic death benefit can guarantee that your beneficiaries will receive the current contract value, typically without the delays of probate.
Enhanced death benefits, which are generally designed to hedge against market downturns or rising inflation, can cost you an additional 50 basis points per year or more. While some investors may believe an enhanced death benefit is worth the extra cost, these insurance fees can cut into your returns.
If your objective is efficient wealth transfer, you may want to look at other possibilities. For example, if you are insurable, a term-life contract may be a more cost-efficient alternative. Unlike variable annuity assets, life insurance is not subject to ordinary income taxes when passed on to beneficiaries.
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Mon Mar 16, 2009 10:13 pm |
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suraja
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If you're using it as a wealth-transfer strategy. term-life only makes sense if you die quickly. What's the cost of a $1 million term life policy on a 90-year-old, or God forbid a 100-year-old? It's going to be very expensive to keep a term life policy in force if you live to a ripe old age.
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Fri Aug 07, 2009 2:10 am |
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