1035 Exchanges

The current arena of linked benefit/asset based/hybrid LTC has roots going back almost 30 years when the Golden Rule Company (now OneAmerica) introduced Asset Care as a single premium product.

Asset-Care offers more funding options than any of our peers including recurring premiums (10 pay, 20 pay, or “whole life”) as well as single premium from cash, qualified money, non-qualified deferred annuities, and via 1035 exchange.

It is vitally important to understand the guidelines for 1035 exchanges apply to all of the products in the Care Solutions portfolio (Asset-Care and Annuity Care).  The chart atached (courtesy of the AALTCI Long Term Care Planning using 1035 Exchanges booklet) summarizes the type of 1035 exchanges that can be facilitated and what they can be exchanged into.

One thing that is vitally important to remember is that 1035 exchanges must be “like to like”.  A single life policy cannot be exchanged into a survivorship life insurance policy.  Keep this in mind when you are gathering information to develop a funding solution for your clients’ extended healthcare plans.

BUT, do not let this paint you into a corner where you think that an existing single life policy (life insurance or annuity) cannot be utilized as a funding source for a joint Care Solutions policy.



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