Securing Your Future and Theirs: Annuities and Estate Planning
September 23, 2025
Grandparents Day, which always falls on the first Sunday after Labor Day in the United States, is a perfect time to celebrate the love and support grandparents give to their families. Annuities can be an important part of that support — helping grandparents safeguard their own financial security while protecting their grandchildren’s future.
How do annuities fit into estate planning? Although there is no one-size-fits-all solution, annuities can play an important role in a well-rounded financial portfolio. The right product will provide steady lifetime income now, while helping to preserve your legacy and assets for future generations.
What Role Do Annuities Play in Estate Planning?
Annuities work best when complementing other financial vehicles, like a will or trust. To ensure your annuity will pass to a beneficiary, consider the following:
- Check the contract. Most include a basic death benefit that allows the remaining value to be passed to an heir.
- Purchase a death benefit rider. This rider provides for enhanced death benefits exceeding the original investment amount. Keep in mind the beneficiaries will have to pay taxes on this income.
- Purchase a long-term care rider. Diseases like Parkinson’s and Alzheimer’s are expensive to manage as they progress. A long-term care rider can help pay for these kinds of medical costs if needed.
What Are the Benefits for Grandparents and Their Families?
Annuities offer so many advantages for grandparents and their loved ones. For one thing, reliable lifetime income means you can keep your independence and reduce the burden on your family. And because annuity payments can help pay for living expenses, you may not need to dip into savings accounts, sell investments or your home, or drain retirement accounts just to cover unexpected costs.
In terms of providing for the future of your grandchildren, you can set up annuities as gifts now to help fund caregiving or future education costs, a down payment on a home, or even wedding expenses.
What To Consider Before Including Annuities in Your Plan
Unlike life insurance payouts, payments from the annuity death benefit are considered taxable income. Always discuss potential tax implications with both your designated beneficiary and your tax advisor.
A trusted estate planner can help you understand the different payment options. Some married couples, for instance, purchase an annuity with a joint and survivor option. This step ensures payments will continue even after one partner passes away.
A period certain option, also known as a fixed-term annuity, provides predictable payments that will last for the length of time you designate. This money is protected from market volatility, and if you pass away during the guaranteed period, you can select an heir to receive the remaining payments.
A Lasting Gift of Financial Peace
Annuities are a wonderful way to create a meaningful legacy, take care of loved ones, and empower your dreams while you’re still living. Remember, financial planning with intention is an act of love, especially for grandparents thinking ahead.
At 1891 Financial Life, we specialize in providing tailored insurance solutions that cater to diverse needs. Our team is equipped to help you navigate these challenges with expertise and compassion. Contact us today for personalized assistance and to explore your options.
About 1891 Financial Life
Our culture is about looking out — for you, for others, for family, for the community. That is how we go “Beyond Life Insurance.”
At 1891 Financial Life, we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. In 2023, 1891 Financial Life was listed by Forbes as one of “The World’s Best Life Insurance Companies.”
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.