Best Way to Leverage

First off – thank you for your ideas, feedback, suggestions and questions.  The whole purpose of this weekly distribution is to share ideas with you.

One question that I am asked often is “why do you talk about Annuity Care  so much when you have the whole Care Solutions portfolio  to talk about?”

It’s a fair question.  Simply, I talk about the Annuity Care product solutions because they are the best for of leverage available to most people and, as I shared last week, a tremendous way to produce a revenue neutral long term care solution.

The numbers are amazing.  A survey conducted by the Insurance Information Institute found that there were over $3 billion in deferred annuity assets in 2017.  This includes fixed, indexed, and variable annuity products.

According to Gallup’s 2013 Annuity Survey, the following can help you see why Annuity Care should be a long term care funding option.

  • The average age of an annuity purchaser was 51
  • The current age of an annuity owner is 70
  • 86% cited the tax treatment of annuities important to their decision
  • 87% agree that guarantees are important aspects of annuities
  • 87% consider a guaranteed lifetime withdrawal to be valuable

There is more to the story.  Consider these numbers …

  • 79% expect to use as a resource to not become a burden to their family
  • 73% plan to use as an emergency fund for catastrophic illness or for nursing home care
  • 40% do not expect to take money except for an emergency

Finally, when asked about long term care or a catastrophic health event, 47% expressed concern that such an event could bankrupt them in retirement.

As I said last week, too often annuities are liquidated for extended healthcare (LTC) needs and a taxable event occurs when they could be avoided if the monies were placed in an annuity-based LTC solution.

A 1035 exchange from a nonqualifed deferred annuity into one of the Annuity Care products will convert tax-deferred accumulation into tax-free LTC benefits without creating any taxable distribution at transfer or redemption for LTC.

The numbers are in our favor.  We need to have the discussion where we again focus on the need and create the most tax-efficient solution for LTC.


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