The 1035 and Annuity Care

Remember, the ideal funding source for any Annuity Care solution comes from an existing nonqualified deferred annuity with gain.  Also remember, this is simply a repositioning strategy which does not impact your client’s current income or taxes.

A problem that occasionally arises is that the amount of money in the existing annuity is large and the “ceding company” will not allow for a partial exchange or the money is coming from a life insurance policy where a partial exchange cannot occur.

When this situation occurs, in almost every case, the advisor fears that the deal is dead. 

That is not the case – if you listened to the LTC Coffee Break broadcast from July 14, you heard about a OneAmerica solution to this dilemma

In the event that you don’t wish to view the episode, let me recap the solution.  A 1035 exchange of the full proceeds into a OneAmerica Transfer Annuity can make the funding of an Annuity Care policy possible. 

Effectively, what we are doing is moving 100% of the existing annuity (or life insurance cash surrender value) into the OneAmerica Transfer then portioning out  a Care Solutions product before moving the balance into ANY deferred annuity with ANY carrier.

Remember – the objective of this transaction is to transform tax-deferred accumulation into a tax-free long term care benefit.  And, the obstacle was the 1035 limitation imposed by the ceding carrier.

Using the Transfer Annuity, the objective was accomplished.

As a reminder, join Michael Florio and me for a Coffee Break.  We broadcast live every Tuesday at 10 am and have our recorded library open 24/7.


One other reminder. “The Great Retirement Income Gap” consumer webcast takes place every Tuesday evening at 7 pm (eastern) is running until August 25.  

Please, drop me an email at for more information abou tour virtual consumer seminar or to get a customized consumer seminar and campaign!


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