One of the great things about variable annuities is that they can provide a client with a guaranteed stream of income for life. In many cases clients are concerned with running out of money during their retirement years so we consider a variable annuity with a living benefit as an option to address this concern. What would you do if a client said I want lifetime income for me, my children, and their children? What would you say? Did you know you can provide a solution?
Lincoln has a product and strategy that accomplishes just that. This can be accomplished through the utilization of a unique benefit that they have and specific titling of the annuity contract. The annuity contract must be set up with Grandpa/Grandma as the owner, Son/Daughter as the beneficiary, and Grandson/Granddaughter as the annuitant. The reason for this is when the Grandparent passes away the beneficiary (son/daughter) then becomes the owner of the contract and the contract continues. At this time they rename the existing annuitant (Grandson/Granddaughter) as the beneficiary on the contract as well. When they pass away, the Grandson/Granddaughter becomes the owner on the contract, thus providing a third generation of lifetime income.
This strategy can also work in some cases when a Trust is the owner. However, it does not work for all Trusts and their needs to be certain language in the trust for it to work.
For more information on this strategy and the guidelines or how to set it up in different situations please give me a call.
Contact Micah Hesting for more information:
Advisor Relationships/Business Development Strategist