Help with Client: Need to Know where to Put Death Benefit Funds

[Mick_Keyou]

This is actually for my Mother In Law. I sent this to my upline and they provided me a couple options. She was inquiring if there were other options so I'm posting here.

Here is what I sent to my upline:

My father in law passed away in March & my mother in law sent me the following:

She mailed me a contract summary form for a Single Premium Deferred Fixed Annuity. On 11/26/14 it will have been in force 13 years.

The illustration's closest information is "End of contract year 10" with the following values:

Guaranteed: Surrender Value $15,020.92. Account Value $15,157.34. I cannot find a guaranteed interest rate. All values are with an assumed interest rate of 4.5%

She also stated that she has an additional $30,000 in her savings account from another life policy.

She is wanting to know her options and best use of these funds.

Her goal is to not have it sitting in her savings account, however she wants a policy that she can have access to these funds in case of an emergency. She is also concerned with any potential tax liabilities.

I'm wondering what would be her best option based on her goal?

 

[Tahoe Ray]

This is actually for my Mother In Law. I sent this to my upline and they provided me a couple options. She was inquiring if there were other options so I'm posting here.

Here is what I sent to my upline:

My father in law passed away in March & my mother in law sent me the following:

She mailed me a contract summary form for a Single Premium Deferred Fixed Annuity. On 11/26/14 it will have been in force 13 years.

The illustration's closest information is "End of contract year 10" with the following values:

Guaranteed: Surrender Value $15,020.92. Account Value $15,157.34. I cannot find a guaranteed interest rate. All values are with an assumed interest rate of 4.5%

She also stated that she has an additional $30,000 in her savings account from another life policy.

She is wanting to know her options and best use of these funds.

Her goal is to not have it sitting in her savings account, however she wants a policy that she can have access to these funds in case of an emergency. She is also concerned with any potential tax liabilities.

I'm wondering what would be her best option based on her goal?

Call the carrier to verify the current and guaranteed rates as well as the account balance. Assuming that she can continue the policy under a spousal continuation provision, 4.5% being paid now in a vehicle that is likely liquid is excellent. I just reviewed a policy last week that was issued in 1997 and it had a 3.5% fixed minimum (so maybe yours is close). Anything over 2.5-3% and I wouldn't touch it (aside from making sure that it is in her name as owner and updating any beneficiaries).

The bank money could be placed with any one of a number of carriers who offer ROP on their SPIUL or SPWL. Leverage for death, ROP for emergencies, potential for growth, and some allow accessibility to the DB for LTC. It is really hard to say without knowing age, state, health, overall financial picture (is this all of her liquid cash? what kind of expenses does she have? Will she likely not need the money?, etc., etc.)

There are plenty of options...

 

[Mick_Keyou]

Thanks Tahoe Ray! That was very helpful.