Eligible Person

As you have read in previous installments of Fridays with Fisher, the Pension Protection Act created an opportunity for your clients to fund any of our Annuity Care products via IRC section 1035 exchange from cash value life insurance or deferred annuity proceeds (cash can also be used as a funding source).

With our Annuity Care products, a single annuitant can add their spouse as an Eligible Person to their policy.  This provides access to the LTC benefits of Annuity Care to the annuitant’s spouse.

Let’s assume that Mrs. Aspen purchases an Annuity Care solution via 1035 exchange from a deferred annuity where she is the owner/annuitant.  She remains the owner/annuitant and can designate her spouse as the eligible person and primary beneficiary.  Her spouse will have no rights of ownership but is eligible for LTC benefits.  If she predeceases her spouse, Annuity Care will remain in force for the remainder of her spouse’s life.

Here are some important things to remember:

  • The eligible person must be the spouse
  • The eligible person must be named on the application
  • The eligible person must be names as the primary beneficiary
  • Both the annuitant and eligible person must be insurable

Also, remember that the Annuity Care products:

  • Provide tax-free LTC benefits
  • Can be a limited duration or provide unlimited lifetime benefits
  • Can be issued up to age 85
  • Are underwritten with no more than a telephone interview

Finally, keep in mind that with OneAmerica two lives provide distinct advantages over individual policies.