New IRA Distribution Regs Boost Life Insurance Planning
National Underwriter (Life/Health) (04/02/01) Vol. 105, No. 14 p.14; Parrish, Steve

The Internal Revenue Service regulations on Individual Retirement Account distributions provide considerable sales and planning opportunities. The regulations, which came out in January 2001, enable the IRA owner to stretch the distributions over a much longer period of time. Using a uniform table, a married IRA owner can take a lower distribution than was possible in past years. In addition, at death, the beneficiary is now allowed to operate the account as it stands--or, should they choose, roll it into a new IRA. Children, upon the death of the surviving spouse, can continue minimum distributions over the life expectancy of each beneficiary. If the child dies before the end of the payout period, distributions can proceed until that period is reached--payable to the designated beneficiaries, selected by the child. In effect, the length of IRA distributions can now exceed 50 years. As IRA accounts continue to grow over generations, life insurance can be used to pay estate costs.

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