1035 Exchange & Deferred Annuities

The Pension Protection Act of 2010 created the opportunity to 1035 exchange life insurance or non-qualified deferred annuity proceeds into “qualified” long term care products like Asset-Care & Annuity Care.

A 1035 exchange provides a powerful way to re-purpose an existing policy (with gain) into a long term care solution.  Think of it this way – we can turn “tax deferred growth into tax-free distributions when used to pay for LTC services.”

Our Annuity Care solutions come on either a fixed or indexed annuity chassis and, when the continuation of benefit rider is included, can provide up to unlimited lifetime benefits.  Meaning … even when the annuity has no cash value, tax-free distributions for long term care continue.

An advantage of Annuity Care is that the client receives benefits whether they use it pay for LTC services or not.  Simply, whatever is not used is passed to whomever the client designates.

These benefits could include:

  • Premiums that never increase  (if COB is funded from non-1035 money)
  • Benefits that never decrease
  • Asset growth at guaranteed rates
  • Access to funds if needed
  • Death benefits if not used for LTC
  • Return-of-premium options
  • Lifetime LTC benefits

On top of that, a spouse can be added to an individual annuity as an “eligible person”.  This turns “her plan into their plan”!

And, in many cases, the exchange is balance sheet neutral.

Want more info?  Follow these links:

Indexed Annuity Care Producer Guide
Annuity Care Brochure
Annuity Care Ineligible Conditions


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