{"id":7652,"date":"2011-03-03T20:33:00","date_gmt":"2011-03-04T01:33:00","guid":{"rendered":"http:\/\/staging.annuityfyi.com\/blog\/?p=426"},"modified":"2023-02-15T02:40:19","modified_gmt":"2023-02-15T02:40:19","slug":"real-world-scenarios-variable-annuity-transfer","status":"publish","type":"post","link":"https:\/\/staging.annuityfyi.com\/blog\/2011\/03\/real-world-scenarios-variable-annuity-transfer\/","title":{"rendered":"Real World Scenarios: Variable Annuity Transfer"},"content":{"rendered":"<p class=\"b\">Here is the next installment in our series of questions from people like you.<\/p>\n<p class=\"b\"><strong>A broker suggested that I move my grand-fathered life insurance policy into a <a title=\"variable annuity\" href=\"\/variable-annuities\/\" target=\"_blank\" rel=\"noopener\">variable annuity<\/a> for better performance. Is this a wise move?<\/strong><\/p>\n<p>We don\u2019t think so. Grand-fathered single premium life policies (SPLs)  \t\t\t\t\t\twere such a good thing that the IRS disallowed them on June 21, 1988.  \t\t\t\t\t\tPeople who already owned them were allowed to keep them \u2014 hence the  \t\t\t\t\t\tterm \u201cgrand-fathered.\u201d They are tax-free versus tax-deferred, and \t\t\t\t\t\tthey transfer income tax free (although not estate tax free if you  \t\t\t\t\t\tare the owner) to your beneficiaries.<\/p>\n<p>Some investors are tempted to upgrade because these grand-fathered  \t\t\t\t\t\tSPLs are not as competitive as today\u2019s newer life and <a title=\"annuity\" href=\"https:\/\/staging.annuityfyi.com\/\" target=\"_blank\" rel=\"noopener\">annuity<\/a> policies. \t\t\t\t\t\tAnnuity FYI typically does not recommend transferring a grand-fathered  \t\t\t\t\t\tSPL to an annuity: we believe that anyone who was lucky enough (or  \t\t\t\t\t\tsmart enough) to have purchased one prior to the tax law change should  \t\t\t\t\t\tkeep it. It rarely makes sense to go from something that is tax free  \t\t\t\t\t\tto something that is tax deferred: by doing so you would need to far \t\t\t\t\t\texceed the returns of the tax free investment in order to make tax  \t\t\t\t\t\tdeferred annuity the right choice. Furthermore, this would usually  \t\t\t\t\t\trequire going from a guaranteed (fixed) instrument to a non-guaranteed  \t\t\t\t\t\t(variable) instrument. Rather than transferring your grand-fathered  \t\t\t\t\t\tSPL to an annuity, we would typically suggest upgrading your older  \t\t\t\t\t\tgrand-fathered life policy to a new one if you can qualify. If you  \t\t\t\t\t\tcan\u2019t qualify, consider repositioning other assets into the annuity \t\t\t\t\t\tand keep the life policy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here is the next installment in our series of questions from people like you. A broker suggested that I move my grand-fathered life insurance policy into a variable annuity for better performance. Is this a wise move? We don\u2019t think so. Grand-fathered single premium life &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Real World Scenarios: Variable Annuity Transfer\" class=\"read-more button\" href=\"https:\/\/staging.annuityfyi.com\/blog\/2011\/03\/real-world-scenarios-variable-annuity-transfer\/#more-7652\" aria-label=\"Read more about Real World Scenarios: Variable Annuity Transfer\">Read more<\/a><\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55,215,471,227,66],"tags":[54,65],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/posts\/7652"}],"collection":[{"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/comments?post=7652"}],"version-history":[{"count":1,"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/posts\/7652\/revisions"}],"predecessor-version":[{"id":24989,"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/posts\/7652\/revisions\/24989"}],"wp:attachment":[{"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/media?parent=7652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/categories?post=7652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.annuityfyi.com\/wp-json\/wp\/v2\/tags?post=7652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}