Topic: Using Annuities To Fund LTC

Video Resources:

Questions on Annuities? Contact our specialist Tom Merrion

Unable to watch the video? Please read the full transcript below:

Many clients acknowledge the need for long term care coverage; however they may struggle with how to pay for it.  Some plan to self insure by maintaining their assets in mutual funds or CDs with the plan to draw down on their assets in case they need care.  Unfortunately today’s mutual fund and CD rates are rather low.

What we like to offer as an alternative is to place assets in a single premium immediate annuity or SPIA, so that the cost of the long term care premium is covered by the payout on the annuity.  Some of our LTC carriers still offer a 10 pay contract, so we can match this with a 10 pay SPIA payout nearly guaranteeing a paid up contract.  This will reduce the total overall out of pocket expense from the client and guarantee that they will not have to sell assets in a down market.  Another benefit to a SPIA, particularly on the life payout options is that when the client does start to use their LTC plan and the premiums are waived the annuity continues to pay out its benefit, so the client will have additional funds available for any expense they choose.

With everyone’s busy schedule today it is nice to create a “set it and forget it” scenario. Using an annuity to fund LTC will allow the clients to focus on the more enjoyable facets of life, and allow agents to earn additional compensation, first on the LTC plan and then on the SPIA. For additional information or case design help please call Resource Brokerage at 800-605-1200.

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