Over the past few weeks, I’ve shared, thus the use of Annuity Care & Indexed Annuity Care for both a nonqualified and qualified annuity funding opportunity for LTC funding. Along with that, I shared the only turn-key strategy in the industry with Asset Care.  They all garnered push-back from people telling me, “I can do better than that.”

So this week, I want to delve back into this discussion and play a little “what if”.

Let’s keep our eyes on nonqualified annuity money as I ask “what if” to the producer who says that an “income doubler on my indexed product will do better.”

Assuming that both annuities have the same account value of $500,000 with a basis of $150,000 and gain of $250,000 when the needs care at age 82. 

“What if” number 1 – Care

What if the diagnosis is a cognitive impairment like Alzheimer’s?  Will the annuity pay for that?  Many do not.

What if they want to receive care at home or in an assisted living facility?  Will the annuity pay for that?  Many do not.

Annuity Care products will pay for all levels of care (home or facility based) and benefits are triggered by either a cognitive impairment or the inability to perform 2 of 6 ADLS.

“What if” number 2 – Annuity Distributions

What if they do qualify for double the income, how does that impact their taxes?  Since it is income, it will be taxed as ordinary income and, if that amount is significant, have an impact on means tested benefits in the future such as Medicare premiums via the IRMAA surcharge.

Annuity Care products provide tax-free benefits for all levels of care!

“What if” number 3 – Waiver of charges

What if they do qualify, what does that waiver of surrender charges provide them?  Will the gain be taxed when it is distributed?  Since they are only waiving the surrender charge, there is likely to be a tax consequence for the distributions.  (see “what if” number 2 for the impact)

Since Annuity Care products are Pension Protection Act compliant, distributions from the policy for long-term care support & services are tax-free and that person can be at home or in a facility with a terminal or recoverable condition.

Lastly …

All that I am saying this week is … don’t be afraid to ask “what if” about how a product will impact a situation. 

What if it was that easy?  If it was – everyone would be doing what we do.