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.