dcf income payments pros and cons

As with any investment, there are pros and cons to DCF Income Payments. Take a moment to read through these pros and cons, and move on to FAQ page to see the most frequently asked questions we get from customers.

Remember, DCF Income Payments are used in three distinct ‘safe money’ scenarios- Income Now, Income Later, and Safe Growth.  The ‘pros’ for one scenario or investor may be a ‘con’ in another investor.  The only important answer is, is it right for YOU?

Fixed Term Investment

Fixed Payment, Pays to Buyer or Heirs

Pros

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Cons

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Analysis:

With DCF Income Payments, you are making an investment that stops paying when the principal and interest is paid back.  This is just like when you borrow money- the loan is closed and the payments cease when you as the borrower pay in full… but in the case of a DCF Income Payment, you are the one receiving the payments from the insurance carrier.

If you need a lifetime income in retirement that you and your spouse can never outlive, you should consider a Lifetime Income Guarantee (AKA LIG) policy, with DCF Income Payments filling in the years prior to the LIG starts.

Alternatively, consider an Immediate Annuity or a Hybrid Annuity with a lifetime income rider.  LIG and Immediate Annuities are tied to lifetime(s), and you can not outlive the income. That payout, however, may be lower than a DCF Payment Income unless you live a very long time.

Frequency and Duration of Payments

Absolute Payment

Pros

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Cons

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Analysis:

Create a Trust to be the receiving entity, to skip probate. Plus, nearly all our payment streams use a servicing company to receive the payments, for ease of reassignment or change of payee. Consult your own tax and estate planners regarding Trusts.

Liquidity

DCF Income Payments Do Not Offer Partial Surrender Liquidity

Pros

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Cons

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Analysis:

Devote only that portion of your assets that you can safely set aside in a fixed and long term investment. Deal with liquidity with other assets. Know that it is easy to re-sell all the payments, but no easy to get partial liquidity.

Profitability

DCF Income Payments Are More Profitable Than Other Fixed Investments

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Analysis:

This is self-explanatory. Higher yield fixed income means lower cost to secure your financial future, leaving more left over.

Volatility

DCF Income Payments Have No Volatility

Pros

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Cons

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Analysis:

Consider a DCF Income Payment as a “Yield To Maturity” investment. Devote only that portion of your assets that you can safely set aside in a fixed and long-term investment. Deal with liquidity with other assets. If you feel you may have a need to sell and can do so at a profit, having serviced payments may facilitate this sale and reassignment.

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