What will we be covering in this annuity review?In this review, we will be going over the details about the EMC National Life Single Premium Immediate Annuity (SPIA):
- Product type
- Current rates
- Realistic long term return expectations
- How it is used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.
Back in the early 1900s, life expectancy in the United States was somewhere in the neighborhood of 41 years. Today, however, it is not uncommon at all for many people to live twice that long. It’s even been said that the first person to reach age 150 has already been born! This means that not only is it possible to spend a decade, two, or even three, in retirement but that it’s becoming more of the norm rather than the exception. However, even though a nice long retirement can be very appealing to most people, it can be difficult at best to live comfortably if you don’t have enough money coming in each month to pay your living expenses. One way to help you ensure that you not only have an ongoing retirement income but one that could last for the remainder of your life is to purchase an annuity. These products, issued by insurance companies, will typically offer a lifetime income option that guarantees you an incoming cash flow for as long as you need it. But, before you run out and sign on the dotted line for any type of annuity, it is important to first understand that not all annuities are exactly alike. In fact, not by a long shot. In addition to that, these products will often come with an insane amount of “fine print”, so while you may think that the product will offer you certain benefits, you may actually need to endure certain fees, charges, and/or tradeoffs in order to get the benefits you had anticipated. Therefore, because immediate annuities require that you contribute a large amount of money into the account right from the get-go, it is extremely important that you know exactly what it is that you’re getting into, as well as what could happen if you decide that you want to get out of it. That’s where the Annuity Gator can come in!
Annuity and Retirement Income Planning Information You Can TrustIf you’ve never been to our website, we’d like to personally welcome you here to Annuity Gator. We are a team of experts (aka, geeks) who spent lots of time researching and educating consumers about retirement income products – primarily annuities. With the volatile stock market – coupled with low-interest rates – today, many people are unsure if they will be able to retire at all, much live a life of travel and fun. But we may be able to offer you a solution. We’ve been researching annuities for many years now – far longer than our competition. You may have run across some of our competitors. They’re typically the ones who go on and on about how they can offer you a great rate, no risk, and a guaranteed income in retirement. But that is really only partly true. So, while these claims may initially sound very enticing, these websites are only telling you some of the information. So, prior to moving forward with a decision – either to buy or to move on – just be certain that you have all of the pertinent facts. So, if you’re ready to get started, let’s dive in!
The EMC National Life Single Premium Immediate Annuity (SPIA) at a Glance
|Single Premium Immediate Annuity
|EMC National Life
|Type of Product
|A.M. Best Rating
Opening Thoughts on the EMC National Life Single Premium Immediate AnnuityEMC National Life is a financially strong life insurance carrier. It is an affiliate of EMC Insurance Companies, an insurance enterprise that has been in business for more than a century. With a rating of A- (Excellent) from A.m. Best, this company offers simple products and provides superior services to its policyholders. As of year-end 2018, EMC National Life had total assets in excess of $909 million, and total life insurance in force of $13.42 billion. Likewise, the carrier’s total capital and surplus and asset valuation reserve for 2018 was more than $122 million. So, the company is well-capitalized and considered to be strong, stable, and able to pay out the claims of its insurance and annuity holders. Today, with so many employers getting rid of their defined benefit pension plans, it has really become the responsibility of individuals to make sure that they convert their savings over into an income stream – and that the income continues to last throughout the remainder of their lifetime. A financial vehicle like the Single Premium Immediate Annuity (SPIA) from EMC National Life could fit the bill for solving these issues. That’s because, in return for a contribution, a SPIA will begin paying an income immediately (or within the first 12 months you own the plan). However, it is also important to remember that, just like any other financial product, not all annuities are the same. So, it is highly recommended that you take a good, close look at this – or any other annuity that you are considering – before you commit to it.
Before we get into the in-depth details, we have some legal disclosures to present…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. EMC National Life has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners. Want to more about how annuities really work? Click here to receive our updated annuity report.
How EMC National Life Describes the Single Premium AnnuityAccording to EMC National Life’s website, the Single Premium Immediate Annuity (SPIA) is designed to provide a guaranteed, steady income immediately after purchase. This annuity guarantees that these income payments will last for a specified period of time, or even for the remainder of your lifetime – regardless of how long that may be. Additional features that you will find on the SPIA from EMC National Life include:
- $100 payout per period (five-year minimum)
- Any issue age
- A variety of settlement options available
How an Insurance or Investment Professional Might Pitch the EMC Life SPIA AnnuityIf you’ve been presented the EMC National Life’s Single Premium Immediate Annuity (SPIA) by your current insurance or financial advisor, there are likely a few key items that he or she touched on in order to entice you to purchase it. First, this product can offer you a guarantee when it comes to income in retirement. This includes providing you with an income stream that will last throughout the remainder of your lifetime, or for a certain amount of time if you so choose. But even though a guaranteed lifetime income may be able to help you sleep better at night, there are some potential drawbacks that you should consider, too, before you commit a large chunk of money to this annuity. For instance, once this annuity has been converted to income, the decision is non-reversible. This means that you will not be able to dig into your lump sum of cash – even if you have a financial emergency. Given that, it is imperative to keep in mind that the purchase of an annuity is a long term decision.
What About Taxes and/or Fees on the Single Premium Immediate Annuity from EMC?As with other annuities, there are some tax- and fee-related areas to be aware of with the EMC National Life’s Single Premium Immediate Annuity. For instance, in this case, if you purchase an immediate annuity with after-tax dollars, then each of your annuity income payments that are made will consist of both a taxable income portion and a return of premium portion (which is non-taxable). However, if you have used money from a traditional IRA or employer-sponsored retirement plan (such as a 401k) where the money you contributed to the annuity has not yet been taxed, then you will owe taxes on 100% of the income distributions you receive. This, in turn, can make a big difference in the amount of income you are actually able to spend.
The Annuity Gator’s End Take on the EMC National Life Single Premium Immediate AnnuityAlthough an immediate annuity might not be right for everyone, the EMC National Life Single Premium Immediate Annuity (SPIA) could be a good option for you if you are seeking the following benefits:
- A reliable income stream right away (or one that starts within 12 months after purchasing the annuity)
- A place to move funds from an IRA, 401(k), or other type of retirement plan so that you can convert it from a lump sum of savings into income
- A solution to the worry about running out of income in retirement
- Are sensitive to market movements
- Feel that you may need some (or all) of your funds for other needs
- Do not plan to use the annuity for income