Posts Tagged ‘Long Term Care’

ANNUITIES UNDERUTILIZED FOR TAX-FREE LTC BENEFITS, DATA SUGGESTS

Thursday, November 7th, 2019

About 18 percent of all U.S. households own a deferred annuity, estimates the LIMRA Secure Retirement Institute, yet data suggest many annuities will never be activated for monthly income, leaving potential tax consequences for beneficiaries.

Many of these individuals can benefit by learning more about exchanges under Internal Revenue Code section 1035 of the Federal Tax Law, which can offer tax benefits for beneficiaries as well as provide tax-free long-term care (LTC) benefits, should they be needed.

“Americans have nearly $3 trillion in assets in fixed and variable annuities,” said Chris Coudret, vice president and chief distribution officer at OneAmerica®1. “Annuities can be a more versatile way to provide income during retirement than many people – and financial professionals – realize.”

A new consumer resource, Guide to Long-Term Care Planning Using 1035 Exchanges, explores the basics of how 1035 exchanges can benefit individuals and includes several real-life scenarios.

“The Pension Protection Act (PPA) provides meaningful tax- and long-term care planning advantages to consumers,” said Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI), publisher of the guide. “Few people are familiar with this provision, which encourages individuals to plan for the possibility of needing additional income to cover LTC needs.”

Among other provisions, the PPA enables income tax-free withdrawals from specific annuity contracts that pay for qualifying LTC expenses or LTC insurance premiums. This includes fixed interest annuities with LTC benefits, such as OneAmerica annuity-based hybrid LTC protection.

These annuities provide tax deferral and non-LTC liquidity, while offering a guaranteed payout benefit and the option for lifetime LTC benefits. If policyholders don’t utilize their full LTC benefits, a death benefit passes to the named beneficiary. They can be purchased for a single person or shared between two people, and premiums won’t increase. For more information about OneAmerica LTC solutions, visit www.oneamerica.com.

Repositioning assets to take advantage of the PPA is relatively simple, Coudret said. Under section 1035, an existing annuity can be exchanged into a new annuity on a tax-free basis, so all one needs to do is transfer all or a portion of the existing annuity into a hybrid annuity product featuring LTC protection.

“This new guide can be a tremendous help to financial professionals looking for information and resources for their client conversations,” said Coudret.

Tammy Lieber, Senior Public Relations Manager, 317-285-1462

1 Table 25, Year-End Deferred Annuity Assets by Market Type, U.S. Individual Annuity Yearbook – 2016, LIMRA Secure Retirement Institute, 2017.

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About OneAmerica®

A national leader in the insurance and financial services marketplace for more than 140 years, the companies of OneAmerica have helped customers build and protect their financial futures. OneAmerica offers a variety of products and services to serve the financial needs of their policyholders and customers. These products include retirement plan products and recordkeeping services, individual life insurance, annuities, asset-based long-term care solutions and employee benefit plan products. Products are issued and underwritten by the companies of OneAmerica and distributed through a nationwide network of employees, agents, brokers and other sources who are committed to providing value to our customers. To learn more about our products, services and the companies of OneAmerica, visit OneAmerica.com/companies.

OneAmerica® is the marketing name for the companies of OneAmerica. AALTCI is not an affiliate of the companies of OneAmerica. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice. This information is not designed to promote nor to endorse 1035 exchanges. Before using a 1035 exchange carefully weigh all the benefits, costs, and implications of replacing a policy.

Products issued and underwritten by The State Life Insurance Company® (State Life), Indianapolis, IN, a OneAmerica company that offers the Care Solutions product suite. All guarantees are subject to the claims paying ability of State Life.

*On July 20, 2017, State Life was rated A+ (Superior) by A.M. Best. This is the second highest of 16 possible ratings assigned by the agency.

Hybrid Long Term Care policies are flying off the shelves….

Sunday, August 11th, 2019

Hybrid Long Term Care contracts are “flying off our shelves” here at Beck Insurance Agency!

Hybrid Long Term Care
Hybrid long term care insurance is the product we’ve all been waiting for.

The good news?  We can’t sell out, our “inventory” is limitless!

Today, a stay in a nursing home is around $7,200 a month, or around $86,400 a year.  Home health care is around $4,000 a month, or annually $48,000. 

If you need this level of care what is your plan on how to pay for it?  Do you have 100% of your assets in an irrevocable trust?  If so, are you beyond the five year look back?  Is your plan simply having your assets liquidated?  Do you have enough cash set aside to pay out of pocket?  Or would you rather transfer that cost to another party and pass that money on to your loved ones? 

This potential expense is probably the largest uninsured exposure in the average person’s personal risk management plan.  Let’s set up a day and time to review and explore potential solutions.  Let’s close this potentially devastating exposure today.  Call Beck Insurance Agency 419-446-2777 or click here and request an appointment.

Joseph D. Beck, CIC, VP, V.S. Beck Insurance Agency, Inc. 

NEW Alternative to traditional long term care insurance

Tuesday, January 29th, 2019

Hybrid Life Insurance/Long Term Care coverage from Beck Insurance Agency

This is a relatively new concept in the market and something you may be interested in. With hybrid Life Insurance/Long Term Care coverage, you can address two very important needs at one time: Life Insurance needs which provide for things like funeral expenses, paying off debt, and estate creation for family, buyout agreements, estate equalization, and Long-Term Care needs that may arise later in life.

Here’s how the coverage works: Secure a hybrid whole life policy then add a Long-Term Care rider with a monthly benefit at 2%-5% of the total death benefit amount, subject to the life insurance limit or $350,000, whichever is less.

This is an incredible product that creates an opportunity to secure and lock in long-term care coverage as well as the rate; depending on the premium payment structure. It also provides much greater returns in that should you pass away without requiring monthly care, your heirs receive the death benefit tax free. Should you decide later that you no longer need the protection, you can cancel the policy and take back your cash value – which after 5-6 years is generally higher than the amount of premiums paid. And of course, if you were to need long-term care you would have coverage when the time came.

If this is something that is of interest and you would like more information, please call (or click) Beck Insurance Agency at 419-446-2777 and we can review your needs and possible solutions.

Long Term Care Insurance

Friday, August 3rd, 2018

An estimated 70% of individuals 65 or older will at some point require some type of long term care services.

According to Genworth, the 2018 average monthly cost of service for Toledo area nursing homes is $7,017. That’s over $84,000 a year!

A private room averages $7,989, while a home health aide would still set you back nearly $4,200 a month.

If you become part of the estimated 70% that requires long term care services….how do you plan to pay for it?

If you are married, would these costs leave your spouse with anything? Your family?

Beck Insurance Agency has several products and methods available in addition to conventional LTC products to help leverage against these possible costs.  Contact us today to schedule a review.  Click here, or call Beck Insurance at 419-446-2325.

Conventional long term care insurance is too expensive now.

Thursday, June 14th, 2018

Fortunately, many of our life insurance markets have rolled out unconventional products that provide affordable long term care insurance solutions. One such solution available through Beck Insurance is Lincoln Financial Groups “Money Guard II”.

Planning ahead with Lincoln MoneyGuard® II gives you flexible options beginning at age 40. This universal life insurance with an optional long-term care benefit rider gives you a choice of premium payment options of one through 25* years.

Unlike traditional long-term care insurance, your policy costs are set at issue and will never increase provided your premiums are paid as planned and no loans or withdrawals are taken. Your policy provides benefits, even if you never need care, provided all total planned premiums are paid.

You’ve got benefits:

Benefits if you need care

You get more for your money because your policy provides income tax-free reimbursements for qualified long-term care expenses worth more than your premium payments.1 Once eligible, there’s no deductible or waiting period, which could make a real difference in your total out-of-pocket costs for qualified long-term care expenses.

Return of premium Options

You have options. You may choose to maximize your long-term care benefits. A return of 80% of your paid premiums is available once all total planned premiums are paid.3

Or you can maximize your return of premium — 100% return of premium is available after year five, subject to the vesting schedule below, provided all premiums are paid as planned; additional cost applies.3

Vesting schedule
Year 1: 80%
Year 2: 84%
Year 3: 88%
Year 4: 92%
Year 5: 96%
Year 6+: 100%

Stay in control with added advantages

Take the next step toward your future with Lincoln MoneyGuard® II.
1. Add inflation protection options4 to help keep pace with rising long-term care costs.
2. Feel confident if you live abroad because your policy includes international benefits.
3. Help protect your savings and your legacy.

Call Beck Insurance today at 419-446-2777, or click here for more information on alternative, affordable Long Term Care solutions.

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