Insurance Agents Selling Annuity Products Have Leveraged Long-Term Care Option

LOS ANGELES - March 4, 2024 - PRLog -- 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 "Generally, the first dollars withdrawn, even if they are used to pay for long-term care expenses, will be subject to income taxation," he noted.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."

"Learn more about 1035 exchanges that can really benefit your senior clients who purchased their annuity eight to 10 years ago," Slome suggests. "These new leveraged LTC annuities will generally accept 1035 exchanges up to age 80."

To learn more about leveraged long-term care annuities visit https://www.aaltci.org/tax-tips-annuity-ltc/ a webpage recently posted by the Association with examples.

Jesse Slome is director of the American Association for Long-Term Care Insurance https://www.aaltci.org and one of the leading advocates supporting insurance professionals who market Medicare, long-term care and other senior oriented insurance financial products.