Structured Annuities, Inc.Side-by-side Comparison |
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| Issue/Concern | Structured Settlement | Variable Life Insurance Policy |
|---|---|---|
| What types of securities/ insurance products support the payments? | A fixed annuity contract issued by a life insurance company. Assets are invested in the insurance company’s general account. | A variable life policy (VLI) issued by a life insurance company. Assets are invested in separate account that invest in equities, bonds or money market instruments. |
| Can this option provide a stable, lifetime income? | Yes. Payments and distribution schedule are determined up front. Can provide a dependable, predictable income stream that you cannot outlive. | Designed to provide a death benefit rather than an income stream. In most cases, you have to pay the company periodic premiums. |
| Is there a guarantee with this option? | Yes. The annuity issuer guarantees payments, as provided by the terms of the structured settlement agreement. | Some VLI contracts guarantee a minimum death benefit as long as you continue to pay the premium. The cash value of policy is subject to risks that affect the underling investments. |
| What are the costs and fees associated with this option? | No cost to the annuitant. | Charges and expenses are deducted from the gross premium, the policy, the separate account and/or underlying funds. If deduced from gross premium, fees may include an administrative charge, a sales load and state premium taxes. Deductions at the policy level may include insurance fees. Deductions from separate accounts may include investment management fees, mortality risk and expense risk fees. |
| Will this option keep pace with inflation? | Yes, with a Cost-of-Living-Adjustment (COLA) feature. | Depends on the performance of underlying investments. |
| What are the tax consequences? | No income taxes on death benefit. Local premium and estate taxes may apply. Loans or withdrawal will reduce the policy’s cash value and death benefit. Liquidation of earnings is subject to ordinary income tax and if taken prior to age 59 1/2, a ten-percent federal penalty may apply. | No income taxes on death benefit. Local premium and estate taxes may apply. Loans or withdrawal will reduce the policy’s cash value and death benefit. Liquidation of earnings is subject to ordinary income tax and if taken prior to age 59 1/2, a ten-percent federal penalty may apply. |
| Is this option affected by market fluctuations? | No. Benefit payments are determined and fixed at the time the annuity contract is issued. | Yes. Cash values and death benefit will fluctuate (may decrease to 0) based on market conditions. |
| Can I make changes to this option after I select it? | No. Payment amount and schedule are fixed and may not be changed or accelerated. | Policy may be terminated or cash value may be obtained through policy loan provisions. Surrender charge may apply. Loans or withdrawals will reduce the policy’s cash value and death benefit. Liquidation of earnings is subject to ordinary income tax and if taken prior to age 59 1/2, a ten-percent federal penalty may apply. |
| Information provided by Hartford Life *Important Note: Neither Hartford Life nor its agents give legal or tax advice. Since tax laws are subject to change, the brief discussion of options here cannot be considered complete or necessarily up to date. Please consult your own attorney or tax advisor for more details. 6/11/99 |
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Structured Annuities, Inc. Website: www.saidot.com |
4330 West Vickery Blvd. Fort Worth, TX 76107 |
| Consult your attorney and/or accountant. We do not give tax or legal advice. | ||