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Efficient Funding of Long-Term Care
Non-Indexed Annuity
The client
Age 75 to 85; has $150,000 from a large build up in a Non-Qualified Annuity not subject to surrender charges or money from a CD; views proceeds as lazy or emergency money.
The situation
Client is concerned about efficiently funding an extended health care or Long-Term Care (LTC) event. Has already identified assets to use but wants preservation of their capital, a reasonable rate of return and access and control over their money if they need it. The agent’s current BD doesn’t allow sale of Indexed Annuities.
A solution
To address the specific concerns of the client, a 1035 transfer to Annuity Care, base policy only, may be a possible solution.
This solution offers the client on $150,000:
- The ability to access gains tax-free for extended care or LTC events
- A 34.8% tax-free income stream for 36 months ($4,348 a month) for qualifying LTC expenses
- Can add a spouse or other insured giving both access to the full monthly benefit
- Retain access and control over the assets just like in their current annuity
- No medical underwriting or cognitive phone interview for base policy only
- Ability to add a rider doubling pool of assets or lifetime coverage (requires cognitive phone interview)
Summary of recommendation
- Non-Qualified Annuity worth $150,000 (large amount of gain)
- 1035 to OneAmerica Non-Qualified Annuity (base policy only)
- $4,348/month available tax-free for LTC event for 36 months
- If not used for LTC, proceeds pass to beneficiary
Annuity Care I & II Facts at a Glance
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