- 477
On reading on the various uses of annuities sometime back I wondered if they're ever used to fund LTC premiums? Anyone ever done this?
Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
NHB_MMA said:On reading on the various uses of annuities sometime back I wondered if they're ever used to fund LTC premiums? Anyone ever done this?
James said:Its done but I don't think its the most productive way of funding future needs of LTC. Yet I don't think you should sell an Annuity to people nearing retirement that does not have a LTC option to it unless their LTC planning is already properly funded.
NHB_MMA said:James said:Its done but I don't think its the most productive way of funding future needs of LTC. Yet I don't think you should sell an Annuity to people nearing retirement that does not have a LTC option to it unless their LTC planning is already properly funded.
Annuities with LTC benefits usually only have limited or partial benefits, right? That is the impression I have from things I've heard, but I am not an expert on them.
I think the potential use I was thinking of is someone that wants a very comprehensive coverage plan, but does not want to pay the sizeable premium out of their current monthly income. For example, someone wants a high daily amount, lifetime benefits, and some form of inflation protection, but doesn't want to take money out of their nest egg on a regular basis to pay for them at this time. It could be set up like a lump-sum payment through an annuity.
James said:What you're describing is someone that should be interested in protection of Assets. In that case I think a W/L policy would be better suited. Lifetime coverage is a bit much, most are moving away from it as it tends to be more expensive then what is called for. Even John Hancock and other large Carriers of LTC is moving away from lifetime coverage as I believe they are finding it a bit much.
James said:No in the W/L or UL with the ryder they would dip into the DB not the CV of the policy. Basically the same thing as a CI Ryder except it gets triggered by the ADL's. Most common is choosing 1% for five years or 3% for three years of DB as the benefit amount. So for 1% if you want $5,000 a month in benefits you would need a DB of 500,000 W/L contract. While more then a LTC contract for that amount, which is around $3,000 annually in a scenario of don't use it-loose it, which isn't a good selling point. In the W/L contract if you don't use it you pass it along to your beneficiary.