Important consumer shopping tips for Annuities:

1. Always review the annuity contract before you decide to buy an annuity.
2. Don't let an insurance agent get you to sign a form stating you refuse to disclose this information.
3. To find out if an annuity is right for you, think about what your financial goals are for the future.
4. You should understand the long-term nature of your purchase.
5. Compare information for similar contracts from several companies.
6. Ask your insurance agent and/or the company for an explanation of anything you don't understand.
7. Remember that the quality of service you can expect from the company and the agent should be an important factor in your decision.
8. Check with the Department of Insurance to verify that the company and agent are licensed. In order to sell insurance in your state, companies and agents must be licensed.
9. Check the annuity provider's credit rating with such independent agencies such as Standard & Poor's, A.M. Best Co. or Moody's Investors Services.
10. The proof is in the paperwork. As you complete your research and decide to purchase a particular annuity policy, it's important to keep detailed records.

Abstract  

Employees of institutions of higher education are entitled to voluntarily contribute to a tax deferred annuity (TDA). Congress created this tax shelter to encourage and assist university faculty to supplement their retirement income. The TDA has been available for over 20 years, and this study measures its use by a large random sample of currently employed faculty of the State of Ohio. A major finding is that only one-half the sample participates in the TDA program. The study provides statistics on the demographic characteristics of participants and nonparticipants.

January 2008

What is the estate tax value of future state lottery payments? One might think it would be the present value the state used in calculating a lump sum payout. The IRS, however, relying upon the actuarial tables prescribed by IRC § 7520, came up with a higher number in an Ohio case. Several courts have addressed the reasonableness of the tables and reached conflicting conclusions. Recently, a district court in the Ohio case joined those allowing an alternative method.

Carol Negron was the executrix of two estates whose decedents had won the Ohio Super Lotto jackpot prize. Both winners died in 2001 after receiving 11 of 26 annual payments of $256,410 each. Each estate elected to receive a lump-sum distribution of the remaining 15 payments for $2.27 million. The IRS determined values from the tables of $2.66 million for one decedent and $2.77 million for the other. But Negron contended the tables do not reflect a discount appropriate to Ohio lottery proceeds' being nontransferable and therefore not marketable. The government argued the tables do include such a discount.

The Ninth Circuit in Shackleford , 88 AFTR2d 2001-5658, has upheld a departure from the tables, as has the Second Circuit, overruling the Tax Court in Gribauskas , 92 AFTR2d 2003-5914. The Fifth Circuit, on the other hand, has concluded that lottery annuity payments are properly valued by the tables (Cook, 92 AFTR2d 2003-7027), as have district courts in Massachusetts, (Donovan, 95 AFTR2d 2005-2131), Louisiana (Anthony , 95 AFTR2d 2005-2905) and elsewhere.

Although the Fifth Circuit ruled against the taxpayer in Cook , the Ohio district court drew from that opinion a two-part test based on principles already well-established by 1962 (Weller , 38 TC 790): Estates may propose an alternative valuation when (1) the value ascribed by the tables is unrealistic and unreasonable, and (2) a more reasonable and realistic means by which to determine a fair market value is available. Negron, the Ohio court said, had satisfied the first prong of the test, and it gave her an opportunity to demonstrate the second.

Life Insurance Can Help:

1. Replace your income with non-taxable death benefit
2. Reduce the financial burden on your family of having to continue without you
3. Put the kids through school
4. Pay the mortgage, car note, and other debts you leave behind
5. Pay your funeral expenses
6. Pay your estate taxes

How Much Life Insurance Should Someone Get?

• Your life insurance plan should be structured to meet your life circumstances.
• How much life insurance a person should get depends on their life situation. Some people have life insurance through their employer, which sometimes use 1x salary or 2x salary as a coverage limit and may allow the employee to purchase additional term insurance.

Ohio Life Insurance Shopping Tips:

• Your life insurance plan should be structured to meet your life circumstances (for example, a single person may need less life insurance than a couple or a couple with children).
• Life insurance is complicated. Utilize the services of trained insurance professionals. Check with the Ohio Department of Insurance to ensure your agent and company are licensed to do business in the state.
• An agent is not allowed to be the beneficiary of a life insurance policy the agent has sold you - unless the agent is a family member or a funeral director. Nor is the agent allowed to misrepresent any aspect of the policy being sold or a policy you already own or encourage you to put incorrect information on your application.
• Decide what type of life insurance policy you want: term, whole life, universal life or a combination of these policies. Make sure you calculate your total premiums for the life of the policy. It is possible to pay more in premiums than the face amount of the policy.
• Some policies have an accelerated benefits feature, which is a policy provision that lets the policyholder, under certain conditions, collect part of the death benefit before he/she dies.
• Be alert to any promise that you will never have to pay premiums again (the vanishing premium pitch). Also, make sure you are aware of any surrender penalties.
• Don't sign any life insurance application that has not been completely and accurately filled in and dated, and make a copy for your files.
• Immediately study the policy once you receive it and make sure it's exactly what you ordered: many life companies will offer a "free-look" (or "right to review") provision. Take advantage of it.
• The policy owner is the only person who can cancel the policy. If premium payments are not being made the insurer will generally send a payment notice before cancellation.
• Make your premium payment check to the insurance company, not the agent.
• A failure to pay your premium will cause your policy to lapse or it could be terminated.
• Review your policy periodically. Your insurance needs change during different periods of your life.

Life insurance provides money typically to beneficiaries after a loved-one who has life insurance dies. Coverage is often provided by employers but can also be purchased separately through an insurance agent. The Ohio Department of Insurance urges consumers to regularly review their need to secure life insurance as part of their financial and estate planning.

Life Insurance Can Help:

• Replace your income with non-taxable death benefit
• Reduce the financial burden on your family of having to continue without you
• Put the kids through school
• Pay the mortgage, car note, and other debts you leave behind
• Pay your funeral expenses
• Pay your estate taxes

HomeOwnerQuotes.com, a leader online consumer financial quotes has added Life Insurance and Annuities to its list of financial services. 

Consumers shopping for Life Insurance or Annuites can fill out our free Quick Form and get contacted by a qualified local agent with whom they can build a relationship with.