Take the hypothetical situation of Eric Roberts. Eric was the only nephew of his Uncle Ray. They were very close, and Uncle Ray made sure that Eric was taken care of by naming Eric as beneficiary in his life insurance.

After Uncle Ray died, Eric received a letter from his uncle’s insurance company giving him a choice of two death benefit options: receiving $1,900 a month for 60 months or a one time cash payment of $78,991. To Eric, the annuity seemed like the better deal.

But Uncle Ray had a smart advisor. By using Stone Street Capital’s Annuity Liquidity Program, there is a third option that would give Eric a cash payment of $91,102. This is $12,111 more than the insurance company offered.

The agent contacted Eric with this third option. Eric listened because, after all, the agent advised his uncle and there already was a built in relationship. Besides, this new option that gave Eric more money showed that the advisor certainly had Eric’s best interest in mind. Eric took the proceeds from the annuity cash out and put it in insurance products that better matched his needs.

Here’s a hypothetical scenario. Lisa Richards purchased an immediate fixed annuity five years ago. Since that time, Lisa’s advisor learned of Stone Street Capital’s Annuity Liquidity Program™ that gave Lisa a new exit option.

Taking the initiative, Lisa’s advisor found out that the cash value under the Annuity Liquidity Program was $105,000. Lisa’s advisor contacted her with this market cash value of her remaining payments. Lisa didn’t have a need, and decided not to do anything at that time.

Three months later, Lisa decided to start a business and needed $100,000. Lisa remembered that cash value and called her advisor. By liquidating her remaining annuity stream of 60 monthly payments of $2,200, Lisa’s agent was able to provide Lisa the cash she needed.

Take the hypothetical situation of David Jacks. David, 67, had retired and through good financial planning, had a worry free retirement. But one day, he had chest pains and was admitted to the hospital. Luckily, it was not a heart attack. This got David thinking about his son and his grandchildren. Was he being smart about the assets he was passing on?

David had worked hard to earn about $2 million that could be passed on without much of a tax consequence because they were beneath the one-time estate tax exemption, and will have the benefit of a step-up in cost-basis at the time they are passed on. But there was the issue of the immediate annuity, 20 years period certain, he purchased 5 years ago for $1.65 million. He was unsure how that would be passed on to his heirs.

After contacting his advisor, he learned that his son would owe estate taxes equal to 45% of the annuity’s present value – or almost $500,000. On top of that, gains from the underlying investments in the annuity contract could be taxed at his son’s ordinary income tax rate.

David’s advisor used Stone Street Capital’s Annuity Liquidity Program™ to structure a way to pass on more tax-free money to David’s son.

David sold $4,000, which was only a portion of the $8,213 payment he received each month, for the next fifteen years for a total of $452,323. This was used to fund a flexible premium adjustable life policy with a face value of $1.6 million. David would continue to receive $4,213 during the period for which he sold payments. If he was still living after 15 years, he would then begin receiving his full payment of $8,213.

Here’s the real benefit - the wealth transfer to his son. Since insurance proceeds, if set up appropriately, are not taxable, David’s son would get $1.6 million tax-free. Compare that to the net proceeds of just around $600,000 after the tax bill of approximately $500,000 on the present value in the original annuity.