Funding Sources
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Q&A – COB tax deductibility
Question: I am correct that the Continuation of Benefit Rider premium may be deductible? Answer: That is correct. Depending upon a who the premium payer is and how they file their taxes – premiums may be deductible. Our Tax Guide can address this from an individual plan to one paid for by a C-corp – it is a very useful tool for… Continue reading
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1035 Exchange & the Transfer Annuity
Let’s set the stage. The advisor and client agree that Annuity Care is the best way to address their LTC concern. It seems like a slam dunk, the client has a boatload of nonqualified money parked in an index annuity and they want to carve off a small portion to fund their protection. The problem arises. The ceding carrier… Continue reading
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Revenue Neutral Solution
Often times, I am asked for my advice on what product to use and when. My initial response is always going to be “that all depends”. The OneAmerica Care Solutions portfolio is NOT cookie cutter or one size fits all. It is dynamic and capable of providing a LTC funding solution based upon the unique needs, wants,… Continue reading
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Public Safety Officers
Clients who are retired public safety officers can purchase long-term care insurance and then use retirement funds to fund Continuation of Benefits coverage income-tax free. Retired public safety officers can request up to $3,000 per year from their eligible government retirement plan to pay for tax-qualified long-term care (LTC) insurance premiums for themselves, their spouse… Continue reading
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Q&A – tax guide
Question: Where can I go to get information tax information about the Care Solutions products? Answer: Our Tax Guide Booklet produced by the OneAmerica Advanced Sales team is a great starting point. If your scenario is more complex, we can always speak with our Advanced Sales team. In my opinion, they are outstanding! Continue reading
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1035 Exchange & Deferred Annuities
The Pension Protection Act of 2010 created the opportunity to 1035 exchange life insurance or non-qualified deferred annuity proceeds into “qualified” long term care products like Asset-Care & Annuity Care. A 1035 exchange provides a powerful way to re-purpose an existing policy (with gain) into a long term care solution. Think of it this way… Continue reading
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1035 Exchanges
The current arena of linked benefit/asset based/hybrid LTC has roots going back almost 30 years when the Golden Rule Company (now OneAmerica) introduced Asset Care as a single premium product. Asset-Care offers more funding options than any of our peers including recurring premiums (10 pay, 20 pay, or “whole life”) as well as single premium… Continue reading
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Q&A – tax free annuity for LTC
Question: Can a “regular” deferred annuity have withdrawals made from it for LTC expenses, and have those withdrawals treated as tax-free distributions under the PPA? Answer: Every written interpretation indicates that an annuity policy must include the language which makes it qualifying LTC insurance under IRC Section 7702B to allow for withdrawals used for LTC expenses or… Continue reading
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PPA Adds Value to Annuities
Consider this scenario – an individual holds a traditional deferred annuity (fixed, index, or variable) with an account value of $400,000 and a basis of $200,000. If withdrawals are made from this annuity from this annuity (LTC expenses included), the $200,000 of gain will be taxed first as ordinary income. If, however, the annuity was… Continue reading
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Pension Protection Act Basics
The Pension Protection Act, also known as Public Law 109-280, is a wide-ranging piece of legislation that was signed into law August 17, 2006. While the majority of it deals with changes and reforms to pension governance, Section 844 of the act deals specifically with annuities, long-term care and new tax advantages. Since January 1,… Continue reading
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Q&A – 1035 exchanges
Question: Is there any third party information available about using existing life insurance or annuity policies to fund a Care Solutions policy? Answer: Yes. The piece that I like the most is produced by the American Association for Long Term Care Insurance. The booklet, entitled Guide LTC Planning Using 1035 Exchanges. I encourage you to take a look at… Continue reading
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Asset-Care Overview
For nearly 30 years, the concept of asset-based LTC (aka linked benefit or hybrid LTC/life insurance) has existed. As a matter of fact, Asset-Care is the “grand daddy of them all”. Only one other carrier has that same legacy and commitment to the segment of the LTC market. Typically, most people think of asset-based products as a single premium… Continue reading
Fridays with Fisher 
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