Annuities can provide enhanced benefits in addition to the lifetime income stream, growth with 100% downside protection, and tax deferral. I want to explain the benefits that provide Enhanced Death Benefits, Medical Benefits, Nursing Home Assistance, and Return of Premium.
Enhanced Death Benefits
Enhanced Death Benefits are similar to how the lifetime income riders or living benefits work except they are geared towards death versus life. There is zero underwriting to purchase these benefits. Carriers will either allow you to purchase a benefit that is strictly built for wealth transfer or they will allow you to utilize the actual income rider itself as a death benefit. There is usually guaranteed growth for this benefit each year just like an income rider. Most enhanced death benefits will allow your heirs either take a large portion of the death benefit in a lump sum or the entire amount over time.
TIP: If you have Qualified Funds, take out Required Minimum Distributions (RMD) through your penalty free withdrawals this way your benefit will continue to grow each year. This will help preserve your principal as much as possible. Ask your Advisor.
Enhanced Medical Benefits
When planning for retirement, one should consider future health status. Anything can happen, and if/when it does happen, having $$$ available to help with the cost is crucial. There are usually 2 types of these benefits available to you. First, the annuity itself will have benefits built into the product at no additional cost that will allow you to access you cash account for these specific purposes. So if for some reason you can’t meet 2 out of 6 Activities of Daily Living or are terminally ill then the carrier will allow you to access your account with little or no penalties so you can pay for treatment. Secondly, you can purchase enhanced medical benefits in addition to these benefits that are provided with the annuity itself. These usually come in the form of an income rider, and if you the consumer have the above symptoms the carrier will increase your lifetime income payment to help pay for medical bills. Sometimes, the carrier will double or even triple your lifetime income payments. See your advisor.
Nursing Home Benefits
Nursing Home costs is a popular topic amongst retirees, and those costs are usually expensive! How am I going to pay for this? Well, don’t fret. Annuities can help! Nursing Home Benefits are a standard in most if not all annuities. Basically, if you the consumer needs to enter a nursing home, hospital, or hospice, the carriers will allow you to either access the entire cash account lump sum or have it paid over time to you to pay for the facility costs. See you Advisor.
Return of Premium
Finally I want to talk about Return of Premium. A huge objection and misconception amongst annuities is that your $$$ are tied up and you lose ALL control of your funds. This is absolutely false. Liquidity is available in most if not all deferred annuities whether it is through Penalty Free Withdrawals or a Return of Premium benefit. Return of Premium is simply a benefit that will allow the consumer to get their initial premium back at any time of the contract penalty free. Not all annuities have this so once again, see your advisor.