5 Questions for an Instant Approval LTC Coverage Solution
If you have clients, as old as age 87, who can answer “no” to 5 simple questions, AgencyONE has a solution that will pay your client’s LTC expenses without payment of taxes on the distributions.
1. Do you currently use any of these mechanical devices?
| Wheelchair | Walker | Dialysis Machine | Oxygen Equip. |
| Respirator | Stair Lift | Chair Lift | Motorized Scooter |
2. Do you currently need or receive help with any of the Activities of Daily Living (ADLs)?
| Eating | Dressing | Toileting |
| Bathing | Transferring |
3. Do you currently have or have you ever had a diagnosis of or been treated for any of these conditions/diseases?
| Alzheimer’s Disease | Dementia/Memory Loss | ALS (Lou Gehrig’s Disease) | Parkinson’s Disease |
4. Have you ever been diagnosed as having or been told by a medical doctor that you have AIDS, HIV, ARC disorders or tested positive for antibodies for the AIDS virus?
5. Are you currently receiving or have you ever received social security disability income benefits?
With tax season in full swing your clients are especially cognizant of the liabilities they face and may be looking for solutions to help mitigate those liabilities. They may not be fully aware of the tax implications of the policies and accounts they currently hold and might benefit from this Instant Approval LTC solution.
This solution focuses on clients repositioning existing assets for continued growth while maximizing tax efficiency for clients and their spouses. Clients who are willing and able to go through additional underwriting can unlock even more powerful benefits including a lifetime uncapped benefit pool that can cover them and their spouse!
Opportunity – Turn Tax Deferred into Tax-Free
Has a client ever brought you an old policy statement and asked, “what should I do with this?” At AgencyONE we regularly see statements from a range of policies; old, deferred annuities that are underperforming – maybe an indexed annuity with a very low cap, or a variable annuity that has grown significantly and now represents a tax liability to the client and their beneficiaries. We even see individuals that have cash value life insurance whose needs have changed.
Now you can offer a solution to reposition those existing assets and ensure that the money goes towards providing the best care possible, and not to taxes. Just drop an e-app and answer 5 questions. NO phone interview, NO labs, NO exams needed!
Case Study:
Brian, age 65 purchased a variable annuity 20 years ago using a $50,000 single premium. The policy has performed well and now has a contract value of $200,000. With no plans to use the contract for retirement income, Brian intends to use the contract as a pool of emergency funds.
- In scenario A: Brian keeps the variable annuity policy, which grows to $295,000 by age 75 when he needs long term care. He then begins drawing down the account value to pay for LTC services with each initial policy distribution being fully taxable as a distribution of gains.
By the time the policy is depleted, he has paid approximately $73,500 in taxes with a net amount of $221,500 towards his LTC costs.
- In scenario B: Brian executes a 1035 exchange with no tax consequences into a PPA compliant annuity. Furthermore, Brian’s wife Mary was able to answer the knockout questions as well. Mary is added to the new policy as an eligible person who can also access policy values without paying income tax on distributions. When Brian goes on claim at age 75, the policy has an LTC benefit pool of $294K.
By the time the policy is depleted, Brian has paid exactly $0 in taxes with a net amount of $294K towards his LTC costs.
By correctly answering 5 questions that gained them instant approval, Brian and Mary were able to reposition existing assets and ensure that their entire emergency fund went towards LTC expenses and not to taxes.
This Solution is for your clients who:
- Own existing non-qualified annuities out of surrender or cash value life insurance they don’t rely on for income.
- Are concerned about providing for long-term care costs.
- Desire TAX-FREE LTC benefits…even with gains in a non-qualified annuity or Cash Value life insurance.
- Don’t want to go through full underwriting or a phone health interview.
- Understand the importance of LTC coverage for themselves and their spouse – even up to age 87.
Contact AgencyONE’s Case Design Department today at 301.803.7500 to learn how a Pension Protection Act (PPA) compliant policy can help your clients keep their dollars in their pockets and out of the IRS’s.
