CASE STUDY:Creating an LTC Plan by Exchanging Your Tax Deferred Annuity To One With A Tax Qualified Unlimited Long Term Care Rider |
Client Profile: Ted is 72 and Jane is 68. They have planned well and their children are grown and financially independent. Their portfolio is conservatively invested. They are interested in asset preservation. They just reviewed their Medicare and Medicare Supplement policy and they are concerned about their “exposure” to long-term care.
Objectives: Protecting their retirement income by plugging up the holes in Medicare that expose their nest egg to un-insured LTC expenses.
Strategy: Cover both Ted and Jane with a 1035 exchange of their $ 103,500 Annuity (out of surrender with cost basis of $ 60,000) to a One America Annuity with a “tax qualified” LTC rider. Since this is a tax qualified LTC policy, the gain in the annuity can be sheltered.
| Snap Shot One America Annuity Care Joint Age 70 1035 Exchange Annuity to Annuity Creates LTC for both spouses |
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| 1035 Exchange Annuity to Annuity Care | $103,500 |
| COB rider creates catastrophic LTC coverage that can never be exhausted | Unlimited |
| Coverage includes: Home Care, Assisted Living, Skilled Nursing Home, memory Care | $3,000 per month each spouse |
| Combined Monthly Premium for COB Rider | $219 per month Can never be increased |
Highlights: Shelter the gains in the Existing Annuity Policy
Both spouses can be on claim at the same time
LTC can never be exhausted