Market participation and tax-deferred growth can help your clients accumulate wealth over the long term.
EliteDesigns offers investment options from some of the industry’s most highly regarded money managers. This expertise can help diversify your client’s investment portfolio according to their unique wealth accumulation objectives and risk tolerance — from conservative to aggressive.1
The contract owner can choose to manage those assets on their own, work with you, or work with a third party investment adviser to help achieve their financial goals.
The Power of Tax Deferral
Below is an example of how a tax-deferred portfolio can help accumulate wealth faster than a similar portfolio that’s been taxed along the way. The graph below shows 74% more growth on a tax-deferred portfolio over a taxable portfolio.
SOURCE: First Security Benefit Life Insurance and Annuity Company of New York, March 1, 2021. The example above assumes an initial investment of $250,000 with investment earnings of 8% and a federal income tax rate and short-term capital gains tax of 37% and does not reflect the effect of any state taxes. These returns are hypothetical and in no way relate to the actual performance of any investment. The investment return on any particular product may differ substantially. Tax rates and tax treatment of earnings may impact comparative results. The example does not reflect the deduction of the EliteDesigns annuity fees including, mortality and expense risk charge of 0.20%; annual administration fee of 0.25% on all subaccounts; an average fund expense of 1.12%, or the 0.35% optional Return of Premium Death Benefit fee. If such fees were deducted, the values illustrated would be reduced. It is important to note that while taxes on amounts invested in an annuity are deferred until withdrawn, upon withdrawal, tax-deferred performance would be reduced by income taxes on gains. Withdrawals are subject to ordinary income tax and, if made prior to age 59½, may be subject to a 10% IRS penalty tax. Conversely, earnings from investments that do not offer tax deferral are taxed currently, and withdrawals from such an investment are not subject to the penalty tax. Lower maximum tax rates on capital gains and dividends would make the return of the taxable investment more favorable, thereby reducing the difference in performance between the accounts shown. Some situations such as your personal investment horizon and income tax brackets (both current and anticipated), changes in tax rates and tax treatment of investment earnings may impact the results of this comparison. Each person’s situation is different, so these and other considerations must be taken into account when making an investment decision. For illustrative purposes, an income tax and short-term capital gains tax rate of 37% has been used; however, a person’s tax rate will likely change over the course of a 20-year period.
Help your clients manage their legacy
EliteDesigns offers a standard death benefit that provides a cash payment to your clients' named beneficiaries if he or she dies before annuity payments have begun or prior to the payout phase. The standard death benefit is the amount equal to their current contract value.
Additionally, an optional return of premium death benefit2 is available (age 80 or younger, and must be purchased at Contract issue). This benefit is equal to the greater of the amount paid into the contract less any withdrawals or fees, or the current contract value. This optional benefit eliminates any downside risk from the underlying funds to death benefit. In addition to a spousal beneficiary, he or she can also name a non-spousal beneficiary, including children, charities or trust. They can choose to pass their contract value down to loved ones or to causes that are important to them by simply naming beneficiary(ies). In doing so, the account will typically bypass probate.
1Diversification does not assure a profit. Not all underlying investment options are suitable for tactical allocation and active trading.
2Optional Return of Premium Death Benefit: 0.35% Annual Fee