Inherited IRA Transfer into Whole Life Insurance
Do existing IRS Rules permit direct transfer of a traditional inherited IRA into a Whole Life Insurance Contract (IRA annuity)? I am a non-spouse beneficiary who inherited the traditional IRA in 2014 and transferred the traditional inherited IRA into a (lifetime annuitized) fixed rate annuity in 2014 that is maturing in 2021.
Permalink Submitted by Alan - IRA critic on Sun, 2021-06-13 18:13
No, life insurance is not permitted to be held in an IRA. I am surprised you were able to annuitize an inherited IRA. Others have asked which company would offer this, so would appreciate your providing that info. As you may know there are complex IRS Regs dealing with approved annuity forms when an IRA owner annuitizes, as the IRS does not want this process to further extend the life expectancy RMD distribution period, but the Regs are silent regarding a beneficiary annuitizing.
Permalink Submitted by Kenneth Zaepfel on Mon, 2021-06-14 17:31
It was actually an Individual Modified Single-Premium Fixed Rate Deferred Annuity (First Symetra Life Ins. Co.; Custom 7 Annuity). I believe First Symetra no longer offers this product. This product was available in early 2016 subject to either the 5-year stretch option or lifetime option for RMDs for the non-spouse beneficiary of an inherited traditional IRA.