Million Dollar Annuity

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

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

Our “million dollar annuity” strategy is intended to help people maximize the money of their deferred annuity. The demographics for the ideal client are:

  • clients between the ages of 75 and 85
  • clients owning nonqualified deferred annuities NOT intended for income
  • Nonqualified deferred annuities with gain

This leverage 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.”

By repositioning that annuity into a Pension Protection Act (PPA) annuity, we can produce tax free distributions when they are made for qualifying long term care services. This isn’t a new concept, but it is one that is often overlooked.

Here are a few of questions that need to be included in the conversation:

  • Let’s start by reviewing why you bought this annuity.
  • How long have you had this annuity?
  • What would cause you to spend the money in this annuity?
  • Do you own a new type of annuity or an old one?

This sets us on the path to providing a better long term care funding solution with one of our PPA annuity products from OneAmerica – Annuity Care I or Indexed Annuity Care.

If your client can answer “no” to the following underwriting questions, they are a good candidate for an annuity based strategy:

Important underwriting information – a base-only Annuity Care or Indexed Annuity Care solution will require underwriting in addition to the 5 questions above, OneAmerica will perform a Medical Information Bureau (MIB) review, as prescription check, and the proposed insured(s) must possess any of the criteria or conditions detailed in the Annuity Care underwriting guidelines.

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.

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).”