Efficient Funding of Long-Term Care with Non-Qualified Annuities

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 money; 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.

A solution

To address the specific concerns of the client, recommend a 1035 transfer to Indexed Annuity Care^®, base policy only.

This solution offers the client on $150,000:

• The ability to access gains tax-free for extended care or LTC events
• A 50.5% tax-free income stream for 24 months ($6,313 a month) for qualifying LTC expenses
• Can add a spouse or other insured giving both access to the full monthly benefit
• Guaranteed factors increasing annually to determine benefit amount before triggered
• 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 getting lifetime coverage (requires cognitive phone interview) 

Summary of recommendation

• Non-Qualified Annuity worth $150,000 (large amount of gain)
• 1035 to OneAmerica Indexed Annuity (base policy only)
• $6,313/month available tax-free for LTC event for 24 months
• If not used for LTC, proceeds pass to beneficiary