Let me paint a picture for you. You are working with a client who is looking to fund their Asset Care policy. They have worked with you to identify possible funding sources and you identify a couple of small cash value life insurance policies as possible resources.
The problem is that the cash value from both policies is fairly small. One option is to 1035 exchange the policies into an Asset Care base policy then pay for Continuation of Benefit Rider premiums from other resources – this proved to be impossible as their is not enough benefit produced from the exchange. Another is to surrender the policies, put the money aside, and use it along with money from other sources to fund the Asset Care policy. But, a third option exists – purchase Asset Care paying premiums on a recurring basis and reduce the annual outlay by using a 1035 exchange of the existing policies into the Single Premium Drop In Rider (SPDR).
The SPDR is only available with Asset Care recurring premium funding (5-pay, 10-pay, 20-pay, or pay to age 95). The rider allows for your client to “drop in” up to two additional premium payments within the first six months of the policy to help decrease their ongoing premiums. This drop-in option and the amount need to be declared at the time of the application as it could impact the underwriting requirements of the policy.
To see an example, check this out … SPDR Rider
Remember, at OneAmerica, we offer the deepest and broadest portfolio of asset-based long term care solutions in the industry. Our solutions are not a “cookie cutter” plan – our solutions can be customized to meet your client’s unique needs and requirements.
Want more information? Contact me at kevin.fisher@oneamerica.com or at (678) 512-9627.
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