Planning for your financial future is a great step to take, and one that many are starting to understand the importance of. As you sift through all of the fine details and the nitty gritty additions to the annuity you just invested in, you might start to wonder what would happen to this money if you were to pass away unexpectedly. Annuity Genius is here to answer that question for you so that you can feel confident in your investment.
When you sign the contract for your annuity you have the option of naming a beneficiary. Along with that, most fixed annuities will offer a selection of death benefits for you to choose from upon signing. These benefits are decided upon as you determine the term of the annuity and how long the payments will continue. When you do this you also determine whether the payments from your fixed annuity will last for only your life, for the time of yours, and your spouse’s life, or if any remaining funds will be passed along to an heir.
Fixed annuities have pretty simple terms, whatever contribution you put into the account, along with the earnings, is what is paid out. Therefore, you will receive whatever the annuity account was worth upon death. The benefits of a variable annuity on the other hand, can be equally as simple or can be upgraded when you sign the contract. Upgrading your death benefits does increase the amount that you have to contribute to the annuity. Upgraded benefits will vary from each insurance company, also.
Upon your death, the individual that’s going to inherit your annuity is required to pay income tax on any of the gain. This will happen at their ordinary tax rate. There are occurrences where the lump sum that is withdrawn from the account pushes people into a higher tax bracket, in which case they would be required to pay taxes at that rate. If a spouse decides to continue the annuity, there is no withdrawal, so taxation is not a problem.
Annuity Genius has all of the answers to your questions about annuity investments. Contact us today and schedule an appointment with one of our financial experts. We have your future finances in mind, and we want to find you the best possible options in a fixed annuity product.