For the past few weeks, I’ve discussed the benefits of unlimited benefits.  As you have heard, this is personal given my family’s history.  How it plays out is anyone’s guess, but I have practiced what I have been preaching and have a plan and funding. 

Most importantly, I am happy with where we are today if something were to happen tomorrow or a tomorrow somewhere deep in the future.  That is the key to any plan – everyone (especially the client/consumer) has to be pleased with it.

Remember our plan – a monthly LTC benefit of $10,000 with unlimited benefits with 5% inflation for life issued at our current age of 60.  Our single premium just under $540,000. 

Let’s add a wrinkle to the scenario.  Let’s say that we are IRA (qualified money) heavy with $578,130 of it coming in the form of an inherited IRA from my mother.  As you know, because of the SECURE Act, the proceeds of the IRA must be liquidated within 10 years. 

Rather than utilize our cash, we opt to utilize the inherited IRA.  Let’s also assume that the IRA proceeds are inherited before the policy is issued and no distributions have been made.  Here is how that would play out.

What we are going to do first is an IRA rollover to OneAmerica Financial which is a tax-free move as it is a trustee-to-trustee transfer.  That rollover money will fund the deferred annuity portion of the Asset Care – Annuity Funded Whole Life product.

Upon receipt at OneAmerica, a one-time 25% bonus will be added to that money.  Then, it will be distributed over a 10 year period of time to fund the underlying Asset Care policy.  It’s that simple.

When you plug in the numbers, the same LTC benefits that we generated from cash were generated from the inherited IRA using this strategy. 

One last point, there is another option for this.  Rather than funding the policy over 10 years, we could elect to do 5 years.  The one-time bonus is 10% and the annual premium will be higher.  This may be an appealing strategy for someone who has been holding that inherited IRA for a couple of years and is  looking for a funding source.

To learn more about the strategy, you can check out my qualified money funding resource page.