Leveraging clients' annuity assets

February 21, 2018 (Updated June 1, 2018)


Visit our annuity resource page or call Annuity Advisor Services at 866-226-2528 for more on how Vanguard can help you make the most of clients' annuity assets.

Clients who have annuities might wonder how they can use them in their investment plan.

Giving clients options on what to do with their annuities can add value to clients' financial lives and demonstrate your expertise. If you're wondering how you might leverage a client's annuity assets, below are some examples of how you can use the transfer to help benefit your clients.

Save more money

To help your clients keep more of what they earn, you can help them transfer their annuities at other companies to a low-cost, no-load variable annuity using a 1035 exchange—a provision in the tax code that allows policyholders to transfer funds from an annuity to a new annuity policy without having to pay taxes.

Before deciding to switch to another annuity, your clients should consider all the costs—such as maintenance fees, surrender charges, fees for optional riders and death benefits—and the financial strength of the insurance carrier.

Optimize generational wealth transfers

Lower costs, increase investment options, and simplify legacy planning for your clients with a nonqualified stretch option available through the Vanguard Variable Annuity. Beneficiaries can stretch inherited assets over their lifetimes while remaining invested in the market and under your management.1

It can help clients:

  • Limit their short-term tax liability.
  • Use the annuity's cash value, penalty-free.
  • Allow their assets to remain invested with the potential for growth.

It can help you:

  • Educate and assist the next generation.
  • Build new relationships with beneficiaries.
  • Create opportunities to manage other sources of family wealth.

Fund long-term care

Help decrease clients' tax liabilities by educating them on the benefits of making a tax-free transfer of assets to pay for premiums on long-term care (LTC) policies. This type of transfer is a partial 1035 exchange that's made possible through the Pension Protection Act.2

It can help clients:

  • Decrease their tax liability.
  • Pay for LTC policy premiums.
  • Transfer unused cash value to heirs.

It can help you:

  • Provide clients with valuable guidance and reassurance.
  • Educate your clients on specific planning concepts.
  • Gain access to the Vanguard team's experience.

Start leveraging clients' annuity assets

Visit our annuity resource page for more on how our annuity services team can help you evaluate clients' contracts, compare annuity products, and help ensure the smooth transition of any contracts that clients move to Vanguard.

Use our resources to open the door to new opportunities and guide your clients through retirement planning strategies that could benefit the next generation of investors.

1 Required distributions must be made over the beneficiary's lifetime and are based on his or her life expectancy as determined by IRS Table 590 Publication 1.

2 Basis is proportionately distributed, as with any partial 1035 exchange.


  • All investing is subject to risk, including the possible loss of the money you invest.
  • Variable annuities are long-term vehicles designed for retirement purposes and contain underlying investment portfolios that are subject to market fluctuation, investment risk, and possible loss of the money you invest. If you take withdrawals from a variable annuity prior to age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.
  • Before making the decision to switch to another annuity, including the Vanguard Variable Annuity, you should consider all the costs—such as maintenance fees, surrender charges, and fees for optional riders and death benefits—and the financial strength of the insurance carrier.
  • For more information about Vanguard variable annuity products, visit vanguard.com to obtain fund and variable annuity contract prospectuses or, if available, summary prospectuses. Investment objectives, risks, charges, expenses, and other important information about the product are contained in the prospectus; read and consider it carefully before investing.
  • The Vanguard Variable Annuity is a flexible-premium variable annuity issued by Transamerica Premier Life Insurance Company, Cedar Rapids, Iowa (NAIC No. 66281), and in New York State only, by Transamerica Financial Life Insurance Company, Harrison, New York (NAIC No. 70688). Form No. VVAP U 1101 (in Florida, Form No. VVAP U 1101 (FL), in Oregon, Form No. VVAP U 1101 (OR) (R), and VVA ME 0508 (OR2015), and in New York, VVA NY 0208(R13)). GLWB Rider Form No. RGMB 43 0811 (in Florida, RGMB 43 0811 (SI)(FL), RGMB 43 0811 (JT)(FL), in Oregon, RGMB 43 0811 (SI)(OR), RGMB 43 0811 (JT)(OR), and in New York, RGMB 43 0811 (SI)(NY) (REV), RGMB 43 0811 (JT)(NY) (REV)). Return of Premium Death Benefit Rider Form No. VVA RP 0811 (in Florida, VVA RP 0811 (FL), in Oregon, VVA RP 0811 (OR), and in New York, VVA RP 0811 (NY) (REV)), without agent representation. Policy and rider form numbers may vary by state and may not be available in all states. The Vanguard Group administers the Vanguard Variable Annuity for the issuer. Its variable annuity and investment costs rank among the lowest in the industry, according to MornMorningstar, Inc., December 2017. The Vanguard Group, Transamerica Premier Life Insurance Company, and Transamerica Financial Life Insurance Company do not provide tax advice. Investors are encouraged to consult a tax advisor for information on how annuity taxation applies to their individual situations.
  • Product guarantees are subject to the claims-paying ability of the issuing insurance company.
  • This article may not be approved for Georgia, Mississippi, Oregon, or Oklahoma.
  • This material is being provided for informational purposes only. It should not be viewed as an investment recommendation by Transamerica for customers or prospective customers. Customers seeking advice regarding their particular investment needs should contact a financial professional.

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