tag:blogger.com,1999:blog-23550078.post116589823294858706..comments2023-09-29T08:04:32.799-05:00Comments on makingourway: A clear plan toward cashing in my insurance policiesmakingourwayhttp://www.blogger.com/profile/13748811641577990850noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-23550078.post-1165974935881040892006-12-12T19:55:00.000-06:002006-12-12T19:55:00.000-06:00It's foolish to question professional help but I a...It's foolish to question professional help but I always thought the 10% penalty on early withdrawal from variable annuity is 10% on the taxable amount, not 10% of the total withdrawal. If the withdrawal is below your cost basis, there is no taxable amount, and therefore 10% of zero is zero. Can you share what the CPAs said and clear up this misconception? Thanks!<BR/><BR/>TFB<BR/><A HREF="http://financebuff.blogspot.com" REL="nofollow">The Finance Buff</A>Tomhttps://www.blogger.com/profile/09592533267930141428noreply@blogger.comtag:blogger.com,1999:blog-23550078.post-1165974244307752972006-12-12T19:44:00.000-06:002006-12-12T19:44:00.000-06:00You probably have already one more research than m...You probably have already one more research than most, but I would just point to a few links for people in similar situations to consider.<BR/><BR/>You should evaluate the insurance portion for its insurance value, after all the fees/charges are somewhat front-loaded. This would especially be true depending on how long you want the insurancce.<BR/><BR/>You can have you current policy evaluated by the Consumer Federation of America at http://www.evaluatelifeinsurance.org You need a Current Illustration.<BR/><BR/>As for exchanging to an annuity, see http://www.glenndaily.com/bookstore.htm - He has a couple articles on cash value and annuity exchange (but a bit dated). Glenn also does fee consulting.<BR/><BR/>I don't know all your details, but I might do different than you:<BR/><BR/>The fees in an annuity can be minimized in one of the low-load annuities. You mentioned already the tax status, but since the annuity is tax deferred, take that into account when comparing options and growth. You can find a lot of recommendations for low-load annuities, like Vangaurd.<BR/><BR/>Also aren't your policies inside a ILIT? Not sure how to formally handle that but be sure it doesn't change the ownership of your other policies.<BR/><BR/>You mentioned in another blog entry at 20x income in policies for both you and your wife - That is a bit high in my book but might consider ways to reduce some premiums like a joint-life ("first to die") policy, which can have some drawbacks (i.e. how to handle after a divorce for instance). I also might consider tiering several policies (a 10 year with a 30 year, or something like that). I am a bit paranoid myself around insurance and have life, LTC, disability plus health, home, auto, umbrella plus travel and excess medical -- Scary number when I add all the premiums!<BR/><BR/>I am not an insurance expert so don't rely on my opinion.OwtoBahnhttps://www.blogger.com/profile/06170428516524944467noreply@blogger.com