How Mary Jean could use universal life*

This is Mary Jean, a vibrant 75-year-old grandmother of four. She loves to play with her grandkids, goes dancing, and attend social events. She leads a very healthy lifestyle by watching what she eats and exercising.

Mary Jean’s opportunity
She has $50,000 in a bank certificate of deposit, a CD. She has concluded that she will not need it during her lifetime. Mary Jean has earmarked that money to help her grandchildren with their higher education. Here is an alternative available to Mary Jean that might be better then leaving the money in the CD?

One possible option
She could use the money from the $50,000 CD to purchase an Aviva single premium indexed universal policy. Immediately, Mary Jean could get a minimum guaranteed death benefit of $76,923 that’s payable to her beneficiaries’ income tax-free. If she names her four grandchildren as equal beneficiaries, each grandchild would then receive a minimum guaranteed death benefit of $19,230. This is assuming that Mary Jean did not take any loans, withdrawals or make other changes to the policy.

How long would it take to grow a $50,000 CD to $76,923 assuming that taxes are paid on the interest earned each year? Using a 3% interest rate and an income tax bracket of 25%, it would take over 19 years!

The benefits
An Aviva single premium indexed universal life policy guarantees a death benefit immediately while the cash value inside the policy grows tax deferred over time. The insurance policy has early surrender penalties but also offers income flexibility through penalty-free withdrawals and tax-free loans. If Mary Jean had an emergency and needed to take a loan from the cash value it would not be reported as taxable income as long as the policy stays inforce.

How you could use universal life

Mary Jean’s situation is just one example of how you could increase the value of your savings and leave more to the next generation in your family—all with the Aviva single premium indexed universal life insurance policy. A local professional Aviva agent can help you identify ways to make Aviva’s permanent indexed universal life insurance work for you.

*This case study is for illustrative purposes only and reflects a guaranteed death benefit. Any non-guaranteed account values will vary. Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC.This example uses values for MultiChoice Indexed Single Premium Life (form #2EBJ05). Aviva does not authorize its agents, employees, or representatives to give legal, tax or accounting advice. The information on this website reflects our understanding of current laws as they relate to insurance products. These laws are subject to change in the future. Please consult your personal advisor for any needed legal, tax or accounting advice.

All tax related information contained herein is based on our current understanding of federal tax laws as they relate to life insurance or other subject matter discussed. These laws are subject to change in the future. Neither Aviva nor its representatives offer legal or tax advice. You should consult a personal tax advisor on any tax matters. In order to comply with certain U.S. Treasury regulations, please be advised of the following: Unless expressly stated otherwise, any U.S. Federal tax advice contained in these materials is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service. Products issued by and all policy benefits are the responsibility of Aviva Life and Annuity Company, and not that of any other insurer or company.