Peoples benefit life insurance company is a member of an international life insurance, pension and financial services organization. Peoples benefit life insurance offers a number of different life insurance benefits.
What is an annuity?
These are not easy to understand. You will need to know about
1. Qualified vs. Non-Qualified
2. 1035 Exchange
3. Life Insurance vs. Annuity
4. IRA: Traditional vs. Roth
5. Annuity Types:
- variable
- fixed
- deferred / immediate
- flexible / single premium
6. Required minimum distributions
7. Tax Exempt vs. Tax deferred.
Qualified vs. Non-Qualified
A qualified annuity means that pre-tax dollars fund this annuity. A pre-tax dollar funded annuity with peoples benefit life insurance company means that your contributions are a tax deduction. This lowers your present taxable income.
A non-qualified annuity on the other hand is after-tax dollar funded. This means that only the part that arises from earnings is subject to tax when distributed not the whole amount.
You derive no other tax deferred benefit if you put any other tax-qualified funds in the annuity. When considering buying a qualified annuity you should consider other features and not tax deferral.
Life insurance vs. Annuity
Life insurance there are different types of insurance contracts term, universal, whole. It can be either variable financial or traditional financial product. It is a contract made between an individual and an insurance company. People benefit life insurance company will pay out a certain amount of money to the beneficiaries of the policy once the insured individual passes away that is if the contract is still in force.
Annuity
This is a financial product and can be variable or fixed. They provide tax-deferred of your income throughout the accumulation period. Over the payment period peoples benefit life insurance company will pay an income stream to the beneficiary for a certain period. Annuities are long term products and are generally taken out by people who dont need the money immediately.
Both of these products give the beneficiary income and security they are different in that the income is paid out differently.
An annuity is a retirement planning tool whereas a life-insurance is a type of inheritance.
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