Last week, I spoke about using qualified money as a funding vehicle for an Asset Care policy.  I even called out other carriers who offer something like the strategy using a Single Premium Deferred Annuity (which is not a turn-key solution).

PLEASE NOTE: This is not an endorsement for any particular strategy.  It is simple a few points to consider.

Let’s take a look at this comparison for a moment because most every carrier has the ability to offer this strategy.  It’s pretty simple.

• Buy a SPIA.

• Elect the income duration.

• Pay the premium.

It’s pretty simple and a lot like the Asset Care strategy EXCEPT …

With the SPIA, you surrender control of the money.  That is not the case when the Asset Care strategy is employed – the monies are distributed from a deferred annuity via withdrawal offering a but more control than an SPIA which is generally a one-way street.

Another consideration is compensation.  I know that I am not supposed to talk about comp, but it is a factor.  In almost every instance, using a SPIA as a funding vehicle produces comp for both the SPIA and the policy that it is funding.  With the turn-key OneAmerica solution, compensation is only paid on the Asset Care policy. 

A last point that I want to reinforce is that there may be more administrative work on the part of the advisor and/or family.  Simply put, the SPIA may not have the ability to directly assign the payout to whomever the insurance carrier is for the LTC policy.  In some cases, it will be paid to the annuitant then a check would need to be written to the insurance carrier.  It’s just not as clean as the turn-key approach from OneAmerica. 

The right solution for the client is the one which fits most effectively in their plan.  Sometimes it is the turn-key Asset Care solution; other times, it will be a SPIA funding Asset Care; or, some other strategy to manage the monies and then pay the premiums on a regular basis.

It all depends on what works best for the client.

To learn more give my internal Kelley Hilliard at call at (844) 623-2451.