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Frequently Asked Questions

Employers and Plan Sponsors

Chances are it will not. Many school district and governmental employees will experience a significant drop in income when they retire. Having supplemental retirement savings makes good financial sense.

Yes, you can contribute to an IRA. Depending on your income level and tax bracket, your contributions may or may not be tax-deductible

Retirement savings. While helping with college expenses is important for many families, it is crucial to put retirement savings first. There are no financial aid packages for retirement.

Life Insurance

If your insurance protection is Term life, you will have a grace period to make your payment. If by the end of the grace period you have not made a payment, your policy will lapse and you will no longer have coverage.

If your insurance protection is permanent life insurance, you will have a grace period to pay your premium plus some additional options. It may be possible that your policy has sufficient cash value to pay the premium from those policy values. Just be aware that using policy values and benefits to pay the premium due will reduce the policy's cash value and death benefit, and may increase the risk of lapsing the policy. If you don't have sufficient cash value to pay the policy premiums, you may have the options to reduce your face amount to a level that doesn’t require a premium payment.

Most importantly, if you having trouble make your payment, contact the insurance company customer service area. They will be able to give you specific options for your policy.

It is best if you do not name them as the direct beneficiary because most states require that a guardian be appointed to administer the proceeds payable to the minor child and will result in a time delay in creating the guardianship, and therefore, delay in payment of the benefits and potentially additional costs.

The best thing to do is name a guardian, perhaps your spouse, when you establish your beneficiary designation. Another option may be to establish a trust to receive the insurance proceeds for the benefit of the minor child.5 Your insurance agent and/or attorney can assist you with the proper beneficiary designation if you have minor children.

In many cases, yes, if the ownership of the two policies is the same. You will need to go through new underwriting for the new coverage. To avoid taxation on the cash value in your policy in excess of premiums paid, you will want to consider an exchange under Code Section 1035. 1035 Exchanges allow for a tax-free exchange of one life insurance policy for another. There may be circumstances where replacing one policy for another is suitable for your circumstances, but in most cases we believe that replacing an existing policy for a new one is usually not in your best interests. Work with your agent to get all the facts before making such a decision.

Yes, however, if someone other than the person who is insured owns the life insurance policy, that person should also be the beneficiary. Otherwise, at the death of the insured, the death benefit will be treated as a taxable gift from the owner of the policy to the beneficiary.


Yes you can. IRC Section 1035 allows for a tax-free exchange of one annuity for another. Before you decide to exchange one annuity for another, you will also want to consider any surrender charges that may be applied upon surrender of the contract as well as the ne surrender penalty schedule for the new annuity you plan to purchase.

Withdrawals from annuities purchased after August 14, 1982, are taken from earnings first. You will be required to pay income taxes on all earnings taken from the contract. Once you have withdrawn earnings, withdrawals will be made from the premiums paid into the policy. Withdrawals of premium are not subject to income taxes.

If you take withdrawals prior to age 59 ½, withdrawals that are made from the earnings in your contract may also be subject to a 10% premature distribution penalty. Withdrawals of premiums paid are not subject to the premature distribution penalty.

Yes, beneficiaries will be taxed on the tax-deferred interest when they receive those dollars. However, if a beneficiary is the spouse of the owner and the owner dies, he/she may elect to continue the annuity and postpone taxes. If the beneficiary is not the spouse and the owner dies, then the funds must be totally withdrawn within five years or they may be received over the beneficiary’s life expectancy, as long as the beneficiary elects this option with the first 12 months following the annuity owner’s death


Participation in any company plan at any time during the year triggers the deduction phase-out rules tied to your adjusted gross income and filing status.

Yes you can as long as the total combined amount of your contributions don’t exceed the IRS maximum annual allowed amount.

As long as the child has earned income, they can contribute to a Minor IRA. It can be opened as a Traditional IRA or a Roth IRA. To establish a Minor IRA, the account must be opened and held by an adult, as guardian, in the name of the minor. While the guardian is authorized to perform transactions on the account, the minor is considered the registered owner for tax purposes.