Tag Archives: 1035 exchange

Exchanging Your Tax Deferred Annuity To One With A Tax Qualified Unlimited Long Term Care Rider

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
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