Linked Benefit Products

Also called asset-based long term care insurance. They are an alternative to traditional long term care insurance.

The Pension Protection Act allows individuals to move money from one cash value life insurance policy to either a life policy or annuity with long term care benefits without paying capital gains. Annuities can only exchange for another annuity and not a life policy.

Life Insurance with Long Term Care Benefits
Life insurance and long term care benefits in one product, helping you manage your assets now so you can enjoy more financial freedom later. Your premium payment provides a pool of benefit dollars available for long term care for you, or a death benefit for your beneficiaries, or both.

More about the Life/LTC option. --->

Annuity with Long Term Care Benefits
The better annuities that include LTC benefits require some underwriting. A LTC annuity without underwriting would be risker for the insurer. Ask us if there are any annuities without underwriting available in your state.

The idea behind this product is to pair the safety and tax-deferred growth of a single premium deferred annuity (SPDA) with long term care (LTC) coverage. With a few simple choices, you can leverage assets to create a larger pool of benefit dollars available for comprehensive long term care should the need arise.

More about the Annuity/LTC option. --->

Do you have an IRA or a 401k?

Some products allow Qualified (IRA, 401k) money to fund the premium.

This is a great way to use your IRA/401k to cover future long term care costs.

Check with us if this is available in your state. Minimum age: 59 1/2.

What are the advantages of using a Linked Benefit annuity to fund long term care expenses?

Effective 1/1/2010, the withdrawals to pay for qualified long term care expenses from these contracts will be tax free. The IRS is expected to issue guidance on the impact of such payments on the cost basis of the underlying annuity contract. Clients should consult their tax advisors concerning the tax treatment of their annuity contracts. The long term care riders in these products typically provide a long term care benefit pool from 2 to 3 times the premium placed into the contract. By utilizing IRC section 1035, a non-qualified annuity may be exchanged for a Linked Benefit annuity, and this would allow the gain in the contract to be received tax free for qualified long term care expenses. (Pension Protection Act)

In some cases if you need care you'll have a lot more money available for care than what you would have with just a 401k, and you don't have to pay taxes on the benefits.

The best plans require health underwriting. You have to be relatively healthy to buy the better plans. A good broker, agent or advisor would pre-qualify your health, asking about your medications and health history. This way you lessen the risk of going through the application process only to be declined. Insurance companies expect those who sell their policies to pre-qualify the applicant's health. It costs $600-$800 for an insurance company to process an application, whether approved or declined.

Repositioning cash increases funds if LTC is needed.

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