Annuity Care can help you convert your taxable assets to tax-free when they’re used for qualifying LTC. As part of the OneAmerica Care Solutions product suite, it uses a single premium deferred annuity to help protect your retirement income stream if the need for care arises.
It also features a built-in continuation of benefits provision, funded through a monthly charge deducted from your base annuity to extend the length of your protection for a period of time that you choose. In addition, your one-time premium can provide a tax-efficient way to help pay for LTC. And the company may credit a higher interest rate to amounts withdrawn for qualifying LTC expenses.
By choosing to pay with a single premium, you are guaranteed that no more payments will ever be required.
Also, there are no unexpected premium increases sometimes seen with traditional long-term care insurance.
How does Annuity Care work?
Reallocating existing assets like cash, savings, certificates of deposit (CDs), or other annuities into Annuity Care can help maximize those assets if they’re needed to pay for qualifying LTC expenses. And, any funds you don’t use for LTC will pass on to your heirs. Annuity-based products from OneAmerica Care Solutions feature two accounts:
- the accumulated cash value (AV)
- the long-term care accumulated cash value (LTCAV).
Your money is credited interest each month in both accounts, with a higher rate applied to your LTCAV, allowing higher growth to provide more assets to help pay qualifying LTC costs.
Withdrawals are allowed from the LTCAV to help cover qualifying LTC expenses, subject to the monthly LTC limit and a seven-day waiting period.
Product highlights
- Provides 36 months3 of LTC benefits, with the option to purchase extended protection for either an additional 36 months or for your lifetime
- Features a minimum guaranteed interest rate credited to both accounts, which ensures asset growth
- Allows fund withdrawals as soon as seven days aftercare begins to help pay for qualifying LTC.
- Access up to 10 percent of the accumulated cash value (AV) with no surrender charges for non-LTC withdrawals.
Tax advantages
Thanks to the Pension Protection Act (PPA) of 2006, annuity-based products funded with after-tax money (non-qualified funds) receive distinct tax advantages. Qualifying LTC expenses are distributed tax-free, whether from your base contract or the extended protection option.
1035 exchanges
You can exchange an existing non-qualified annuity for one that is eligible for the PPA advantages via either full or partial 1035 exchange.
Your steps to get the care to meet your needs
Underwriting for Annuity Care is slightly more flexible when compared to traditional LTC insurance. It consists of several health questions on the application and a brief telephone interview. No medical exams are necessary.
Benefit triggers
Benefit payments are triggered in one of two ways:
1.) You cannot perform at least two of six Activities of Daily Living (ADLs), which include
- bathing
- maintaining continence
- dressing yourself
- eating/feeding yourself
- toileting (including getting on and off a toilet)
- transferring (like from a bed to a chair)
2.) You require care as a result of a severe cognitive impairment (such as Alzheimer’s disease).
LTC Withdrawals
Actual LTC expenses will be paid from the LTCAV up to the stated monthly LTC benefit limit maximum.
The client will receive the lesser of the monthly LTC limit or the actual charge for care.
Additional benefits
Bed reservations can “hold your spot” in a facility if you require more specialized care in a hospital for a period of time. Respite care allows a primary caregiver to take a short break to travel or have a few days off from providing care.
Cover your spouse
If you own an individual annuity, adding your spouse as an owner can involve much paperwork. But there’s a way to ensure your spouse can also enjoy the protection of your new LTC annuity.
Transfer your existing non-qualified annuity with a single annuitant/owner via 1035 exchange into Annuity Care and designate your spouse as an Eligible Person.
This makes your spouse eligible to receive payments for qualifying LTC expenses. This is a simple way of securing access to LTC protection for your spouse, who might not be listed as an owner or annuitant on your current annuity.
Annuity Care provides more than LTC protection
- Add your spouse to an individually owned annuity
- Access up to 10% of your funds with no surrender charges for non-LTC withdrawals
- Claims Concierge to support you through the claims process
Looking to the future
Americans are living longer than ever, with an average life expectancy nearing 80 years in 2015. Annuity Care provides options to help maximize your protection for as long as you need it.
Long-Term Care Continuation of Benefits option (COB)
Long-term care needs are unpredictable, so we offer a Long-Term Care Continuation of Benefits option to ensure you and your family remain covered after your initial LTC benefits are exhausted. Some diagnoses can require many years of care.
OneAmerica Care Solutions is the only product to offer protection for the extent of a lifelong condition like Alzheimer’s or dementia, instead of just a few years.
The COB protection option can be paid for with either a single premium or be paid with continuous premiums for your lifetime. Premiums are guaranteed to never increase, even on a joint policy, if the first client dies.
Availability may vary by state.
Washington Long-Term Care Tax
OneAmerica meets the requirement to opt out of the Washington Long-Term Care Tax. Apply Now.
