NAILBA ID Trends Resource Guide 2019-20 | Page 22

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 %