beliavsky[at]aol.com wrote:
- quote -

No mention on my part of "purchase" of anything. Simply suggesting
that IF the insured wishes to avoid the possibility of a "spendthrift"
Widow, that he could elect to have a major portion paid as an income.
Cal Lester CLU

You cannot have the best of all worlds in this situation. If his wife's
health becomes poor he can always change the payout election for the
policy.

Since he cannot satisfy every possible goal in the most efficient way
he needs to decide which goal is paramount. If the most important
objective is to prevent his widow from spending all of her assets it
seems to me that Cal's solution is the best possible.

--
_Bill_

Cal Lester wrote:

- quote -

What if, God forbid, when he dies his wife is in poor health, so that
purchase of an annuity, at least at normal rates, would be a very poor
investment?

- quote -

Unfortunately there is some sort of communication problem here.
The Death Proceeds do NOT need any form of "tax-base", they
are simply Income Tax Free. The Beneficiary can do W H A T E V E R
she wants with that money (including the purchase of an Annuity). PERIOD



Bottom line: what I'm looking to do
- quote -

You have (2) two DIFFERENT colored eggs in your basket.

1) a desire to "protect" your WIDOW from being a "spendthrift"
and blowing the proceeds

2) getting the MOST eggs from those proceeds

To take care of #1, you simply CHANGE the Death Proceeds Selection from
Lump Sum, to a specific income for either a number of years or for Life. This
in effect is tantamount to the purchase of an NEW Annuity, however it is instead
done automatically by contract on your demise

#2 is another matter. The income available from the Insurance company would
be a stipulated amount (whatever it is), whereas one could conceivably get
much MORE Income from some sort of Invested Portfolio. On the other hand,
One could LOSE the whole thing.

Therefore, based on what we have discussed to date, I would in all probability
(if you were my client) suggest that you order (select) that $50k be paid in Cash,
and the BALANCE payed out as an income.............
Cal Lester CLU

- quote -

John in VA wrote:
- quote -

You can invest money from a taxable account, or a life insurance policy
death benefit (DB), in a nonqualified annuity. You can read the site

http://www.pathtoinvesting.org/categ...uities_026.htm

and/or search terms such as "qualified annuity" and "nonqualified
annuity" for more information. I also suggest discussing with your wife
how she thinks a DB ought to be inevsted/spent, including the
possibility of buying an annuity, but not committing her to take the DB
in the form of an annuity.

Cal,

Thank you for the info. I do understand that the insurance money (in
the event of my untimely death) is "tax free" - but therein lies the
"problem" (so to speak). My insurance company (State Farm) told me that
since it *is* tax free (therefore, the "income" is not "tax-based"), it
can NOT be placed into an annuity. I know what an annuity is, but
that's where my knowledge ends. I didn't figure there would be a
problem with this. -- Bottom line: what I'm looking to do (for my wife)
is to help her manage this money (again, in the event of my UNTIMELY
death) so that she doesn't drain the funds and leave her broke. So, if
an annuity is not in the picture, what other ways can she use to put
this money to good use and make it work for her? - I've already
stipulated "lump sum" from my life insurance company (OSGLI - retired
military here) - but when she gets that 250 K deposit, I don't want her
to chink away at it until it's all gone. The 250K is the golden goose -
what's the best way for me (her) to get eggs from it? The MOST eggs?

Thanks too to Beliavsky for your input!

Thanks, Cal

John

"Cal Lester" <cal-lester[at]comcast.net> wrote in
news:t62dnYqkv_AfdMffRVn-pw[at]comcast.com:

- quote -

beliavsky[at]aol.com wrote:
- quote -

That is another "option", but the poster gave me the impression that HE
wanted to control her income..........
Cal Lester CLU

John wrote:
- quote -

I don't understand what your insurance company is saying, but I am not
an insurance agent. Upon receiving the death benefit, your wife could
buy an immediate annuity from any insurance company, just as she could
right now with cash.

John, you seem to have some confusion here. There is NEVER a "tax-base"
with the Death Proceeds of a Life Insurance Policy. Death proceeds paid
to a "named beneficiary" are Federal Income Tax FREE.

Now as to what she can do with it:

YOU can "elect" to have the Death Proceeds paid to that Beneficiary
in almost ANY mannner that YOU wish.
a) Lump Sum
b) Specific Payments until the proceeds "run out"
c) Payments for a "specific period of time"
d) A "GUARRANTEED LIFETIME INCOME" payable to your Widow.

All of this info is found INSIDE of the policy.........
Cal Lester CLU


John wrote:
- quote -

Just off the phone with the insurance company, and found that in the
event of my death, my wife would be unable to start an annuity with the
insurance money ($250,000) since it's derivation is not tax-based. With
this in mind, what are other options to providing a steady stream from
this $250,000?