Annuity Rescue Case Study


Leveraging Annuity Income Benefits For Legacy


Client: Barbara, female, age 68

$482K nonqualified variable annuity with an income value of $501,490, and 3.40% annual fees

Current income @ 5% w/d rate = $25,075

The Challenge

Barbara purchased a variable annuity nearly 10 years ago and no longer needs the income as her priorities have shifted. Entering retirement with a pension plan, she is more concerned about protecting her nest egg and now wants to provide a death benefit for her 2 children.

The Solution

After a thorough review of Barbara’s annuity with a focus on her concerns and goals, we were able to provide a solution by researching and shopping the landscape of the most competitive annuity products, resulting in a 12.45% increase to guaranteed lifetime income while reducing fees by 75%. To solve her concern about passing a legacy, we leveraged the guaranteed annual income of $28,197 to purchase a life insurance policy that provides a tax-free death benefit. Barbara was in good health and rated preferred, which allowed her to purchase a $1,318,565 life insurance policy

Benefits for the client
  • Removed any market volatility by providing principal protection
  • Reduced annual fees from 3.40% to 0.95%
  • Increased her guaranteed lifetime income by 12.45%
  • Provided a tax-free death benefit of $1,318,565 (174% more)
Benefits for the advisor
  • Commission paid on two product lines
  • Strengthened relationship with their client