Los Angeles, CA, February 25, 2024 - Seniors who own non-qualified annuities are an excellent prospect for agents marketing long-term care planning solutions suggests Jesse Slome, director of the American Association for Long-Term Care Insurance.
“Millions of Americans make annuities part of their retirement strategy, and that’s smart planning,” states Slome, head of the long-term care insurance advocacy organization. “A significant percentage of non-qualified annuity owners designate this asset as something they’ll use in case of an emergency health care cost. Certainly, long-term care is included in their thinking.”
The problem, according to Slome, is the fact that proceeds withdrawn from non-qualified annuities can become taxable income. “The first dollars withdrawn are the gain and those dollars can be taxable,” Slome explains. “But with some smart planning, that tax risk can be avoided.”
The long-term care insurance expert recently explained the strategy to a group of insurance agents focused on the senior market. “Today, there are a few non-qualified annuities that meet IRS regulations so that all proceeds withdrawn for long-term care costs are not taxable,” Slome explains. “That can be a significant advantage to the annuity owner.”
In addition, Slome pointed out an additional potential benefit offered by some of the available products. “They will provide a multiple that significantly increases the available benefit pool of dollars available to pay for long-term care costs. Instead of say $180,000 in potentially available cash, a couple could have $400,000 or more.”
Slome shared that insurance agents would benefit by helping clients with existing annuities consider a 1035 exchange into one of the newer annuities with long-term care benefit policies. “There are always pros and cons to starting anew,” Slome admits. “But, for the seniors who has no long-term care insurance in place and owns a non-qualified annuity, this can be an excellent planning strategy.”
The American Association recently posted additional information regarding the annuity planning strategy. To learn more, go to https://www.aaltci.org/tax-tips-annuity-ltc/.
The American Association for Long-Term Care Insurance advocates for the importance of planning for the real risk of needing long-term care. The organization posts relevant information such as the 2024 Long-Term Care Insurance Price Index and other statistics and data at https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2024.php.
Contact
American Association for Medicare Supplement Insurance
Jesse Slome
818-597-3205
https://www.aaltci.org
