Tag Archives: Annuity

How Annuities Work

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Annuity Myths and Answers

Myth Question:What happens when you die? Do the insurance companies hold onto your money?
Answer:Income annuities can guarantee that you will continue to be paid as long as you live or as long as you specify. Life income annuity is guaranteed period that will continue until all of your money has been paid back. With this annuity, should you pass away, your beneficiaries are guaranteed to receive all your money when you die — everything you put in plus the interest you’ve earned.

Myth Question:I’m worried that guaranteed income annuities can’t keep up with inflation. Is this a right concern to have?
Answer:Not if you can keep your guaranteed income rising by converting additional savings into guaranteed income. Payout rates typically increase as you age. Your savings can and will buy an increasing income amount.

Myth Question: I’m interested in annuities, but I fear they are difficult to understand and own. Are they that complicated?
Answer:Some annuities are complex, but at MDH we keep annuities simple and straightforward. Here’s how they actually make your life easier:

  • Tax-deferred compounding for a guaranteed savings annuity can give you an easier income tax return and a lower tax bill.
  • Guaranteed income annuities take over the difficult process of creating your own income by instead offering a guaranteed retirement “pay-check.”

Myth Question:I always thought guaranteed savings annuities were only for older or extremely conservative investors? I’m younger, and I’m not necessarily conservative.
Answer:You’ve heard the expression before, and it applies here as well: “Age is but a number”. Savings annuities can diversify your retirement portfolio and help you plan for whatever your future holds years from now.

Myth Question: Once I buy an annuity, I won’t be able to move it without paying taxes. Correct?
Answer:The contrary is actually true. Federal tax regulations permits you to transition your annuity without paying taxes through IRA rollovers and 1035 exchanges.

Types of Structured Settlements

Life Annuity

This means you would receive periodic payments, but for a guaranteed number of years or for your entire life, whichever comes first.

Temporary Life Annuity

For temporary life annuity, you would still receive periodic payments for a guaranteed number of years but only if alive. In other words, with this type of structured settlement you would not have the ability to name a beneficiary.

Lump Sum Annuity

If wanted, you could establish an annuity whereby you would receive a lump sum of money on a specified date in the future. For instance, if you were 55 years old at the time of the incident, you could bolster your retirement funds by having the lump sum set for ten years ahead. This would mean that at age 65 you would have more money on which you could retire.

For the lump sum option a beneficiary could be chosen. However, once you choose the future date, it cannot be changed.

Life Only Annuity

With life only annuity, you would be able to determine the frequency of payments, if the attorney would be paid in periodic payments or a lump sum, and whether you receive any upfront cash in the form of a lump sum prior to the periodic payments being created. Also, payments would be paid for the remainder of your life and no beneficiary provision is offered.

Joint and Survivor Annuity

With joint and survivor annuity, you would still be receive monthly payments for the rest of your life. However,if you chose a beneficiary and that individual were to outlive you, the monthly payments would be transferred. Thus, the chosen beneficiary would receive payments for life.

Interested in learning more about our annuities? Contact us at 1-855-804-FUND (3863) or use the form below:

Is It Best To Sell All or Some of My Structured Settlement?

So you see a commercial and you decide that it is time to sell your structured settlement for lump sums of cash, but you have no idea if you should sell all of it or some. We understand the dilemma.

At MDH, we talk to a lot of people who want to use the money that is owed to them, but still want the flexibility to use their payments later on. A lot of other companies will try to convince you that selling all of your settlement is the best choice. These are companies that are interested their profits.  

We see things a little differently here.  

We want to help you to make the best financial decisions for you and your family. We’ve composed a list of fantastic reasons selling your structured settlement or annuity for cash can help make your dreams happen, while still maintaining the flexibility you need.

Invest in your future. Whether it’s starting your own business or wanting to diversify your portfolio, as a financial institution, we understand the importance of making your money work for you. If the cause of your settlement or annuity makes it difficult for you to find work, then selling some it for a lump sum of cash can give you the boost you need to turn your passion into a new career.

Debt (and stress) reduction. Stress over money is one of the most pervasive and common strains on the health of Americans. If you find yourself losing sleep and in a bad mood because you worry that ends won’t meet, then accelerating your structured settlement is a great way to ensure that you will live out the lifespan of your settlement. 

Auto purchase. Auto loans are notoriously dangerous debt and to make matters worst lenders are still providing unwise subprime loans. We understand the importance of having a reliable car and the exhilaration of purchasing a new one. You should be able to enjoy that without a care.

Tuition expenses. If you or your children have decided to pursue a quality higher education, then selling your structured settlement or annuity is a smart way to focus more on the classes, instead of how to pay back the loans incurred. 

Home repair or improvement. The weather can be unpredictable and the damage it causes can be quite expensive. Whether you want to prepare for the harshness of the upcoming winter, update your house to make it more energy efficient (hint: there’s a tax incentive), or you want to personalize and modernize your home, selling your settlement or annuity for a lump sum of cash should be the first step in making your home more comfortable.

At MDH, your interests are our interests and we want to help you to make the smart financial decision.