When discussing annuities with clients, introducing the “Live On” or “Leave On” question offers a thoughtful framework for decisionmaking. By framing the conversation this way, you help clients establish a strategy that balances current security with legacy for the heirs and chosen charities in their lives.

Money to “Live On.” Structuring the annuity to provide flexible access and stable income is essential. This ensures that the client maintains financial independence, allowing them to control both anticipated and unforeseen expenses. As financial circumstances and priorities change, the strategy adapts seamlessly to meet current needs while aligning with future goals—balancing personal security with the desire to support heirs.

Money to “Leave On.” This strategy leverages annuity assets to fund life insurance, thereby providing heirs with tax-free benefits and the potential to significantly enhance the value of an inheritance. This enables clients to create a lasting legacy that can be multiples of the original annuity’s value, while optimizing the tax efficiency of wealth transfer.

Best of both worlds. If a client prefers to retain their annuity funds, assist them by utilizing two financial products rather than one. Begin by calculating the required premium for the desired life insurance intended for the member’s beneficiaries. Then, propose a plan that allocates a deposit into an annuity to generate the annual premium, while considering any associated tax liabilities. For a more straightforward solution, the annuity proceeds can be placed into a Single Premium Whole Life policy to provide a tax-free inheritance.