Situation: Jack, a widower age 70, had a 15-year old deferred annuity that has grown from $40,000 to about $80,000. His children are the beneficiaries. Recently he learned that at his death, the $40,000 gain is taxable at full ordinary income tax rates, while the value of his condo passes without tax. Jack wants to avoid that tax problem, and having recently stopped working, to comfortably remain in his condo and someday pass it on to his children. To do that, he needed extra money each month.
Solution: He decided to exchange his deferred annuity tax free for a Life with Refund Annuity, generating a guaranteed income check of about $450 each month. Now he can live in his condo for the rest of his life, knowing if he dies before the $80,000 has been paid out to him (about 13 years), his children will receive the balance remaining from the $80,000 refund guarantee. His children will still inherit the condo.