Beneficiary Options for Legacy Care

It is important for all of us to be aware of our options and Legacy Care beneficiaries are no different. As with other annuity contracts, Legacy Care beneficiaries have several ways in which they can receive their proceeds.

Spousal beneficiary
When a Legacy Care policy owner dies before the maturity date and the named
beneficiary is a surviving spouse, the surviving spouse will become the
new contract owner.

  • The contract will continue with its terms unchanged and the surviving spouse will assume all ownership rights.
  • Within 120 days after the owner’s death, the surviving spouse may elect to receive the policy proceeds or withdraw any of the accumulated value without surrender charges.

Non-spousal beneficiary
When a Legacy Care policy owner dies before the maturity date and the named beneficiary is not the surviving spouse:

  • The death proceeds will be paid to the beneficiary in a lump sum no later than 120 days after the owner’s death, unless the beneficiary elects to have the policy distributed within 5 years of death, or the beneficiary elects to have the accumulated value apply under a settlement option.

Important note regarding the IRS:
The IRS, under Section 72 of the Internal Revenue Code, allows a non-spousal beneficiary to wait up to 5 years after the owner’s death to receive proceeds from an annuity.

Legacy Care offers a 5-year surrender schedule. This means if the Legacy Care policy owner dies shortly after purchase, the beneficiary can do one of two things:

  • Surrender during the surrender charge period and receive the greater of premiums paid or the surrender value, or
  • Retain the policy, wait until the surrender period ends and receive the full accumulated value.

During this period, the contract will still continue to accumulate interest.

Legacy Care Beneficiary Options 

Asset-Based LTC Tax Guide

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