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Income Rider vs Annuitization: Which is Better for Index Annuity Clients?

 


Index Annuity with Income Rider
Pros

• Potential Accumulation Value to beneficiary at death of owner
• Control of contract and possible residual value
• Contractual benefits, like Nursing Home Waiver Rider
• Income payments may increase
• Income payments may be stopped and restarted

Cons
• If non-qualified, payments are taxable until principal is reached
• Rider fee reduces Accumulation Value
• Payments likely lower than annuitizing

Annuitization of Index Annuity
Pros

• Payments higher if life only
• Exclusion ratio for non-qualified money
• Annuitization is a standard feature, plus no fee or charge
• No decision needed at time of issue

Cons
• Once payments start, can't be stopped
• No death benefits payable if life-only elected
• No lump sum to the beneficiary
• Contractual benefits cease upon annuitization

If the income amount is the only consideration, annuitizing may be the better solution.

Assume $100,000 Premium and payments beginning after the 5th year, age 65.
• Index annuity with lifetime income benefit rider*: $6,357 annually
• Index annuity with no income rider; guaranteed life-only annuitization**:
$6,682 annually
• Index annuity with no income rider; non-guaranteed life-only annuitization**:
$7,779 annually
• Index annuity with no income rider; non-guaranteed life with 10-year period
certain annuitization**: $7,521 annually

Illustrations
Online illustrations show the index annuity historical growth combined with either an income rider or annuitization! Start your illustration now, click here. Login is required.

Income Rider Sales Resources
Income For Life Client Brochure
Income For Life Agent Guide
Strategic Income Option Client Brochure (DynaMARC only)
Strategic Income Option Agent Guide (DynaMARC only)
FAQ

Questions? Send an email to EquiTrust Sales Support, call 866-598-3694, or visit our website at
Agents.EquiTrust.com

 


EquiTrust does not offer investment advice to any individual or agent and this material should not be construed as investment advice.
FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
 
 

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