Are Annuities Tax-Free At Death

Shawn Plummer

CEO, The Annuity Expert

Are Annuities Tax-Free at Death?

Enhanced Death Benefits:

  • Some annuities offer enhanced death benefits.
  • These benefits can offset taxes owed by beneficiaries.

How Enhanced Death Benefits Work:

  • They provide additional funds upon the annuitant’s death.
  • The extra amount can cover most, if not all, tax liabilities.

Example:

Consider an annuity worth $100,000 with $30,000 in earnings. Upon the annuitant’s death:

  • Beneficiary inherits $100,000.
  • Tax is owed on $30,000 in earnings.
  • If an enhanced death benefit is included, it may cover the taxes on the $30,000.

Conclusion

While annuities are not tax-free at death, selecting one with an enhanced death benefit can significantly reduce the tax burden for beneficiaries. This option ensures more of the annuity’s value is preserved for your loved ones. Contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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