Skip to main content
Sales week header image
?

HAVE CLIENTS WHO NEED INCOME NOW AND INCOME LATER?

The split annuity strategy uses a MYGA and SPIA to solve both objectives

For your clients who need income now, but also want to accumulate income for the future, the split annuity strategy1 could be the perfect solution.
Mature couple smiling on the beach
?

How does the split annuity strategy work?
  • Your client determines their desired income duration and purchases an immediate and a deferred annuity.
  • The immediate annuity provides instant income for a period that matches the duration of the deferred annuity. Payments can be received monthly, quarterly, semiannually or annually.2
  • Based on the duration selected and current rates, the split between the two contracts is determined.

The power of two

The split annuity strategies utilizes two EquiTrust fixed annuities:
  • Confidence Income®, a single-premium immediate annuity with a fixed period, single life and joint payment options
  • Certainty Select®, a single-premium deferred annuity featuring multi-year rate guarantee periods of 3, 5, 6, 8 and 10 years
  • The deferred annuity grows back to the original premium amount, securing Accumulation Value growth to use for income in the future.

What are the advantages of a split annuity strategy?
  • Immediate guaranteed3 income over an income period
  • Tax-deferred growth4
  • Income from the SPIA (with Non-Qualified money) may have an exclusion ratio that could reduce taxable income for the year vs. taking interest withdrawals from the MYGA
  • Preservation of principal
  • Potential to avoid 10% IRS penalty tax for early distributions

See a hypothetical split annuity strategy vs. CD comparison.

Want to run an illustration or get a custom quote for a split annuity case?

Split Annuity flyer
Laptop showing agent website on the screen
View the flyer
Agents.EquiTrust.com
?

Have a client who might benefit from a split annuity strategy?

Visit Agents.EquiTrust.com or call us at 866-598-3694 to run an illustration.
?
EquiTrust logo
NAFA logo

Active Member

 

1 Multiple annuity contracts issued by the same insurance company to the same policyholder during the calendar year may be treated as one annuity product for tax purposes.

 

2 To utilize the split annuity strategy, the minimum period certain option for Confidence Income is five years. Current tax laws define annuity payments as partially a return of principal.

 

3 Guarantees are based on the claims-paying ability of EquiTrust Life Insurance Company. Products not available in all states.  

 

4 Assuming no withdrawals or surrenders. A split annuity may not be appropriate for qualified assets, which are already tax-deferred.

 

EquiTrust does not offer investment advice to any individual or agent/producer and this material should not be construed as investment advice. Products underwritten, issued and distributed by EquiTrust Life Insurance Company, West Des Moines, Iowa. 

 

Product features may vary by state. Rates subject to change.

 

Surrender of the Certainty Select contract may be subject to surrender charge and Market Value Adjustment; withdrawals before age 59½ may result in a 10% IRS penalty tax. 

 

EquiTrust does not offer investment advice to any individual or agent/producer and this material should not be construed as investment advice. 

 

IRAs/qualified plans are already tax-deferred; consider other annuity features.

 

Contract issued on Contract Form Series ET-MYG-2000(11-05), ET-MYG-2000(06-09), 430-SPA(08-03) and ET-SPIA(08-06).

 

© EquiTrust 2024. All rights reserved.

1376-GEN-EM-SW (05-24)

FOR PRODUCER USE ONLY

EquiTrust

7100 Westown Pkwy Suite 200
West Des Moines, IA 50266

 

scroll to top of page
? Questions?