Due to old and unmodified IRS life expectancy tables, particularly table V and VIII, many immediate annuities (mortality polled income contracts) may produce income tax advantages in the form of a “non-taxable” income source. Of course, non-taxable income is not the same as tax free income. How is this possible? It’s possible because these old IRS tables still assume shorter life expectancies derived from 1970s and earlier data. The shorter…
Tag: SPIA Income
Low Interest Rates? Tip Your Toe in the Annuity Mortality Pool
An annuity mortality pool is the collection of all individuals who purchase life contingent annuity contracts from a life insurance company. Most individuals and agents believe, in order to join this pool and to obtain the mortality discounts these contracts offer for better annuity pricing, they are required to purchase annuity contracts supporting life contingent payments out to age 120 or there-a-bouts. These payments typically are supported by joint and survivor,…
