Million Dollar Annuity

One of the best funding sources for long term care comes from nonqualified deferred annuities!

The “million dollar” Annuity Care strategy is intended to help people maximize the value of their deferred annuity. The ideal ideal client is:

• someone who is between the ages of 75 and 85

• is a nonqualified deferred annuity with gain

• owns nonqualified deferred annuities that are NOT intended for income

This opportunity is made possible due to Section 844 of the Pension Protection Act (PPA) which allows for cash value life insurance and deferred annuity proceeds to be exchanged tax free into “annuity and life insurance policies with a long term care feature.” And, that is what the Annuity Care product line provides!

Here are a few statistics to help you visualize the magnitude of this opportunity:

• There is over $3 trillion in nonqualified deferred annuities.¹
• 86% of those annuities were purchased for their tax deferred growth.²
• 73% of them are earmarked as an emergency healthcare fund.³
• Less than 5% of nonqualified deferred annuities are ever annuitized.⁴
• The average age of an annuity owner is over 70.⁵

When you reposition that annuity into a Pension Protection Act (PPA) annuity, distributions when made for long term care support & services are tax free. And, remember this, annuities with income doublers or waiver of charges for nursing home situations do not meet the definition of a PPA qualified annuity.

The Annuity Care solutions are designed to provide tax-free benefits for long term care support and services regardless of them being received in a facility like a nursing home, at home (where most people prefer to be), or other venues such as adult day care, assisted living, and hospice.

Remember the purpose for the repositioning is to create a defined pool of resources to provide monies when a long-term care event occurs. It (the annuity) will continue to grow until monies are needed for LTC. If there is never a need to pay for LTC, then it will pass just like any other deferred annuity.

Here are a few of questions that you should consider when reviewing a client’s annuities:

• What was the purpose when you bought this annuity?
• How long have you had this annuity?
• What would cause you to spend the money in this annuity?

This sets you on the path to providing a long term care funding conversation about how a PPA annuity from OneAmerica (Annuity Care I or Indexed Annuity Care) can benefit them and their families.

Here is how to transform the tax-deferred growth into tax-free LTC distributions from that annuity. Simply answer 5 qualifying questions.

Important underwriting information – if you choose to include the Continuation of Benefits rider, underwriting in addition to the 5 questions above, OneAmerica will perform a phone interview, a Medical Information Bureau (MIB) review, a prescription check.

I’ve set up a complete Million Dollar Plan Using Indexed Annuity Care resource page to provide you with more information on both the strategy and the product – Indexed Annuity Care. 

You will find 4 videos specific to the Million Dollar Plan explaining how Indexed Annuity Care works for the case with a client who is 79 with annuity money earmarked as their emergency health care fund.

The are also Indexed Annuity Care specific pieces as well as other related information.  Take a few minutes and check it out.

Here is what I would like from you … identify 2 or 3 clients who fit the profile, introduce the concept of improving the position using a “new style” annuity THEN contact either Justin or me to discuss the case.

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1 Source: U.S. Individual Annuities, 4th Quarter 2021, LIMRA, 2022. 2 Source:  https://www.annuity-insurers.org/wp-content/uploads/2013/10/2013-Gallup-Survey.pdf ; The Committee of Annuity Insurers, Survey of Owners of Individual Annuity Contracts (The Gallup Organization and Mathew Greenwald & Associates, 2013).”  3 Source:  https://www.annuity-insurers.org/wp-content/uploads/2013/10/2013-Gallup-Survey.pdf ; The Committee of Annuity Insurers, Survey of Owners of Individual Annuity Contracts (The Gallup Organization and Mathew Greenwald & Associates, 2013).”  4 Source: https://www.annuity.org/annuities/annuitization/  last modified 5/5/2023 5 Source:  https://www.annuity-insurers.org/wp-content/uploads/2013/10/2013-Gallup-Survey.pdf ; The Committee of Annuity Insurers, Survey of Owners of Individual Annuity Contracts (The Gallup Organization and Mathew Greenwald & Associates, 2013).”