What will we cover in this review of the Liberty Bankers Single Premium Immediate Annuity (SPIA)?In this annuity review, we will be going over some of the main highlights of the SPIA annuity from Liberty Bankers Life Insurance Company, including the:
- 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 was somewhere in the neighborhood of 41 years. Today, however, it is not uncommon at all for many people to live twice that long. 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, while 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 your need it. But, before you run out and sign on the dotted line for any annuity, it is important to understand that not all annuities are alike. 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 we come in!
Annuity and Retirement Income Planning Information You Can TrustIf this is your first visit to our website, please allow us to officially welcome you to AnnuityGator.com. We are a team of experienced financial professionals who provide highly comprehensive, and non-biased, annuity reviews. We have been doing this for many years now – much longer than some of the other annuity websites that you may have run across in your search for annuity information. In fact, there are a number of copycat sites out there that will make bold claims about their annuity offerings but are really just looking for your name and contact information. We have been doing this for quite some time now, and because of that, many consumers look to us as a highly trusted source of annuity information – especially if they are not quite sure what to look for in a possible annuity purchase. If, by chance, during your quest for more details, it is likely that you have noticed certain sites that tout their “low fees,” “high-income payouts,” or “top-rated annuity carriers.” Unfortunately, although 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 Liberty Bankers Life SPIA (Single Premium Immediate Annuity) at a Glance
|Product Name||Liberty Bankers Life SPIA|
|Issuer||Liberty Bankers Insurance Group|
|Type of Product||Single Premium Immediate Annuity (SPIA)|
|A.M. Best Rating||B++|
|Phone Number||(800) 745-4927|
Opening Thoughts on the Liberty Bankers Life Insurance Company SPIALiberty Bankers Life Insurance Company was established in 1958. For the past six decades, this insurance company has grown and expanded in order to help with meeting its customers’ needs. This insurer is domiciled in the state of Oklahoma, and it is licensed to sell its products in 46 of the U.S. states. With its headquarters in the Dallas, Texas area, LBL has more than 8,000 licensed agents throughout the United States who represent its products and service the company’s customers. In marketing its products and services, LBL uses The Capitol Life Insurance Company – a subsidiary of LBL – which markets products in numerous states. Liberty Bankers Insurance Company (LBL) is owned by Liberty Life Group Trust, a Texas holding company. Liberty Bankers offers a wide array of life insurance and annuity products that can help individuals and businesses with meeting their financial goals. The LBL Group has developed a proven track record of growth of its assets, as well as its insurance premiums, and earnings, over the past decade. Today, the company has in excess of $1.5 billion in assets under management. As a reflection of its financial strength, as well as its claims-paying ability, Liberty Bankers Life Insurance Company has been given the rating of B+ (Very Good) by A.B. Best Company, the most recognized insurer rating agency in the industry. Today, with so many employers doing away with 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 single premium annuity, or SPIA, could be a viable solution for solving these issues. 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 gritty details, here are some legal disclosures…This is an independent product review, not a recommendation to buy or sell an annuity. Liberty Bankers Life has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular annuity. Prior to purchasing any type of investment or insurance product, it is important that you do your own due diligence and that you consult a properly licensed professional if you should have any specific questions that relate to your individual circumstances. All names, marks, and materials that were used for this review are the property of their respective owners. For more information on how to compare annuities in order to determine which one may be right for you, click here to obtain our free annuity report.
How Liberty Bankers Describes the Single Premium Immediate AnnuityOn its website, Liberty Bankers Life describes single payment annuities as a way to provide a guaranteed income stream that will last for your lifetime and can protect you against the risk of outliving your assets. In addition, these annuities could also enable you to provide for your loved ones in the event of death. So, on top of allowing a financially worry-free future, you can also be assured that your survivors will get at least the amount of your annuity contribution returned to them (minus any withdrawals). The SPIA from Liberty Bankers Life requires a minimum of $25,000 contribution. You can then choose from different income options, including:
- Period Certain – With the period certain option, you can receive payments for a time frame of between five and thirty years. If you pass away before the time period has elapsed, the income will continue paying out to a named beneficiary.
- Lifetime Income – The lifetime income option will pay you an income stream from the annuity that lasts for the remainder of your life – regardless of how long that may be. With this income alternative, you may also specify a “backup” time period such as 5 years, 10 years, 15 years, or even 20 years where a beneficiary will continue to receive income if you pass away before the selected time is over.
- Joint Income – The joint income option can ensure that you and another individual – such as your spouse or partner – will receive income until the death of the second person.
The Way a Financial Advisor Might “Pitch” the SPIA from Liberty Bankers LifeIf you’ve been presented with the Liberty Bankers Life’s SPI annuity 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, as well as the life of another individual if you so choose. But even though that may sound enticing, before you commit a large chunk of money to this annuity, there are a few factors to consider. 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 SPIA Annuity from Liberty Bankers Life?There are no annual contract fees associated with the SPIA from Liberty Bankers. However, as with other annuities, there can be some other tax and fee-related areas to be aware of with this product. 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. Also, if you make withdrawals before you have turned age 59 ½, you may also incur yet another penalty. This one is a 10% “early withdrawal” penalty from the IRS. So, depending on when you actually begin your income stream, you may not net out nearly as much as you had hoped to in terms of actual spendable income.
The Annuity Gator’s End Take on the SPIA Annuity from Liberty Bankers LifeAlthough an immediate annuity might not be right for everyone, the Liberty Bankers Life insurance company’s 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 types of retirement plans 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
- Feel that you may need some (or all) of your funds for other needs such as an emergency in the future
- Do not plan to use the annuity for income