22
ID Trends
2019
Never surrender from page 20
Watching for tax consequences
The issue for most of these annuity owners today is that the current account value is
significantly larger than the cash surrender value. While the cash surrender option is not
attractive, neither is the idea of a payout option that lasts 5-10 years or longer because of
the potential negative tax consequences of passing annuity payments on to an heir.
By selling their annuity on the secondary market, many annuity owners are able to receive
a larger dollar amount when compared to what they would receive if they surrendered their
policy. Their financial advisor can take the lump sum and find more efficient ways to put the
money to work for annuity owner’s heirs and beneficiaries.
“Projections are that
nearly $68.4 trillion
in wealth will pass
hands to heirs over
the next 25 years.”
Secondary market success
By having proactive conversations with their clients and comparing liquidity options,
financial advisors and agents, can use the secondary market for annuities to help build
revenues, enhance client relationships and strengthen marketing efforts. Insurance is
a business that prospers when clients win, client victories in the secondary market for
annuities are sure to deliver similar success for agents and advisors.
$65 trillion assets in motion.
Cerulli Associates projects that nearly 45 million U.S. households
will transfer a total of $68.4 trillion in wealth to heirs and charity
over the course of the next 25 years.
$
48
trillion
Greatest
Generation
(87<)
Silent
Generation
(70–87)
Generation X
& Millennials
(<51)
Baby Boomers
(51–69)
Generation X stands to be the primary beneficiary.
By the end of the 25-year period, Baby Boomers will be
replaced by Gen X as the generation with the greatest wealth.
57% of total assets are estimated to be
trasferred to Generation X households.
57 %