Los Angeles, CA, March 06, 2024 –Agents who have senior clients with fixed annuities should consider converting those annuities into leveraged long-term care annuities suggests Jesse Slome, director of the American Association for Long-Term Care Insurance. Slome delivered a special presentation earlier today.
“This is a very valid new retirement planning strategy for seniors with annuities past the surrender penalty period who have no other long-term care plan in place,” Slome shared with agents targeting the senior marketplace. “There are far more annuity owners out there than seniors with long-term care insurance.”
Slome explained to the experts that leaving the current annuity in place could subject the owner to future tax consequences. “Generally, the first dollars withdrawn, even if they are used to pay for long-term care expenses, will be subject to income taxation,” he noted. “Exchanging the current annuity into one that meets IRS regulations could mean that all withdrawals used to pay for long-term care are received tax free. That can be a significant added value on its own.”
The long-term care insurance expert pointed out that newer annuities offered what he refers to as added leverage benefits. “With a traditional annuity, say the value is $150,000 at age 85, that’s the maximum available to pay for long-term care costs,” Slome explains. “An equal annuity that offers added leverage can pay out say as much $400,000 if the owner needs long-term care. Agents have a 1-2 sales punch that will resonate with seniors who have no other long-term care insurance in place.”