Deferred Income Annuities
Sometimes called longevity insurance or a longevity annuity, a Deferred Income Annuity (DIA) usually begins with a single, upfront payment and eventually pays a set amount starting a given number of years after the policy is purchased.
Don’t worry about the taxes on the interest paid until the funds are withdrawn.
Sometimes called longevity insurance or a longevity Annuity, a Deferred Income Annuity (DIA) usually begins with a single, upfront payment and eventually pays a set amount starting at a given number of years after the policy is purchased.
Why Agents Offer Deferred Income Annuities
Insurance companies usually offer higher interest rates for these products. Because part of the principal is returned with each payment, clients receive larger amounts than they would be provided by interest alone.
This product provides stable lifetime income which can never be outlived, or which may be guaranteed for a specific period of time. A client’s principal is secure because funds are guaranteed by assets of the insurer, and not subject to financial market fluctuations.
Once it’s set, the only work required is collecting regular payments; there’s no need to watch markets or track interest rates or dividends.
Preferable Tax Treatment
Unlike other types of annuities — which have a front-loaded tax burden — a DIA defers taxes until later, when it may be taxed at a lower rate.
In addition to a DIA’s built-in flexibility — deciding how much to spend, how long to wait for payments, etc. — clients can choose from various add-ons and options. For example, a “life with cash refund” would return the premium to survivors if the client dies before 85; if the client dies after payments begin, the difference between the premium and payments received would be returned to them.
How To Get Started
If you decide to offer Deferred Income Annuities, we recommend talking to someone from the Premier team of experts. They’ll provide answers to your questions, and have tools available to support your new product offering.
Give us a call today and ask for an Annuity Specialist: 800-365-8208.