New Annuity Offers Incredible Long-term Care Benefit -- Up to 560% of Your Initial Deposit
You likely will live much longer than previous generations of Americans but that increased longevity will come at a high price.
The statistics are frightening. According to the Wall Street Journal, if you are 65 or older, you have a 69% chance of needing some type of Long Term Care. For every one person receiving long-term care in a nursing home, there are 4 people receiving home health care. The principal payment source for home health care services is Medicare.
Unfortunately, Medicare will only pay for home health care if it is considered “skilled care,” which accounts for only 5% of all home health care. Medicaid (the government’s health-care welfare program) pays about 43% of overall long-term care costs. But to qualify, most people spend their entire “nest egg” first – losing their lifetime of savings. Without proper planning, you may be forced to rely on family, friends or the government to pay for long-term care services.
I have a personal story to share about my own father’s final years and the hefty costs that our family incurred to see him through his last days. My dad, Edward, served his country during World War II, fell in love and married a young woman named Elaine in 1944, after he completed his military service. He worked hard and provided well for his wife, my two brothers and me as a successful entrepreneur who founded a company that designed and sold custom-made pool tables. My parents stayed together not only to enjoy a Golden Anniversary but ultimately to celebrate an amazing 60 years of marriage. Naturally, I wanted to see them share their golden years in comfort.
As an estate planner, I anticipated that they would need a good long-term care policy, so in 1988 I used my connections to find the best one available at the time. I purchased it and assumed they would be protected for whatever happened. Unfortunately, the terms and conditions of the policy imposed restrictions that never allowed my parents to benefit from the tens of thousands of dollars that I paid in premiums. It was as if all of that money had been thrown down a rat hole.
My mother cared for my father dedicatedly but it took a physical toll on her and inflicted tsunami-like devastation on their once-ample personal savings. Long-term care costs can take a nest egg of hundreds of thousands of dollars and strip it bare, the way a forest fire leaves the trees burnt and barren.
Since learning that painful lesson, I have been searching the insurance and annuity industries for a product that not only would cover the fast-rising costs of long-term medical care, should it be needed, but also return my money to me or my beneficiaries should it not be needed.
A Solution!
The Holy Grail in my search is finally attainable. A brand-new annuity has just been designed to take advantage of a recent tax-policy change and it is so powerful that I want to share this discovery with you. My hope is that through this breakthrough financial product you and your family will be able to avoid the kind of personal financial disaster that aging and huge long term medical expenses inflicted upon my own parents.
This new tool is two financial products rolled into one. First, it is a fixed annuity that provides a guaranteed minimum return of 3% every year (currently paying 4%). Second, it includes a long-term care policy with such fantastic terms that I wish it had been available to my parents.
The annuity portion of this special combo plan provides a place to deposit low-paying certificates of deposit (CDs), Treasuries, money market funds or existing annuities, especially those that have accumulated taxable gains.
The long-term care feature is so remarkable that I had to do a double-take and check carefully with the insurance provider to be sure I understood it correctly. I am pleased to tell you that there is no mistake.
The amount that you invest in this combo annuity will trigger an “exploding benefit” that will initially pay you up to six times the amount of your original deposit if the funds are ever needed for long-term care. Additionally the exploding LTC benefit increases through the years.
It is by far the best annuity/LTC combo I have ever seen and, in my opinion, much better than a standard stand-alone, use it or lose it long-term care policy, like the one I purchased for my parents.
Tax-Free Benefit
Furthermore, of recent legislation the monthly LTC benefit of this new annuity is free of income taxes. Effective January 1, 2010, The Pension Protection Act of 2006 provides a little known provision stipulating that all monthly income that is received from a qualified annuity, such as the one I have discovered, will be paid out tax-free, if the person who has the coverage cannot perform two of the six activities of daily living (bathing, continence, dressing, eating, transferring, toileting) or is cognitively impaired. Simply stated, beginning New Year’s Day 2010, the exploding value of this annuity (initially up to six times your deposit) will be received TAX-FREE if it is paid out for long-term care. To me that’s exciting!
Turn Tax-Deferred into Tax-Free
If you currently have an annuity, you can exercise your right to exchange that annuity into this new annuity without tax consequences because of Section 1035 of the Internal Revenue Code (IRC). The advantage of exchanging the old for the new is that the new annuity’s LTC “exploding value”, if activated will be paid out income-tax free.
For example, Sarah Smith, 70, has an annuity valued at $100,000, with an original cost basis of $40,000 that is earning 4%. She follows my advice and exchanges her fully taxable annuity into this new exploding-value annuity. Five years late, at age 75, she triggers the long-term care benefit. Sarah would be eligible to withdraw from her long-term care account that has increased in value to a remarkable $614,985, which translates to $4,659 per month, available for 11 years. And because of the new law the entire income will be received TAX FREE.
Had Sarah left her money in her current annuity, she only would have been able to withdraw from an account value of $121,665, of which $81,665 would have been gain and taxed as ordinary income.
No Receipts Required
The last thing seniors or their loved ones want to do is to fill out extensive paperwork to prove that they are eligible for long-term care benefits. As crazy as it sounds, many long-term care policies sold today require proof of purchase for services rendered. Imagine someone who is suffering from Alzheimer’s and cannot remember his or her own name or recognize family members, needing to submit receipts. It makes absolutely no sense.
The LTC provisions of this new combo annuity avoids that problem completely by not requiring any receipts. All that is needed is a physician’s statement indicating that the annuitant cannot perform two of the six activities of daily living (ADLs) or lacks cognitive abilities and after 90 days the monthly benefit is triggered.
Here is a sampling of the many advantages offered by this unique annuity/LTC combo policy:
- An incredible, tax-free long-term care feature;
- Exploding-value long-term care coverage of up to six times your initial deposit, which is triggered if you cannot perform two of six ADLs or are not cognitive;
- Unlike a stand-alone LTC policy, the annuity value is not lost if it is never needed.
- Guaranteed rate on the annuity pool is 3%, with a current rate of 3.25%;
- Guaranteed rate on the long-term care benefit pool is 3%, with a current rate of 4.25%;
- No medical exams are required. A modest telephone interview with an underwriter takes the place of a medical exam and physicians’ statements;
- Most applicants are immediately approved;
- 10% annual liquidity-free withdrawal privileges;
- Only a modest 9% descending surrender charge;
- Free of surrender charges upon an annuitant’s death;
- Allows exchange of an existing tax-deferred annuity into a tax-free LTC benefit;
- Insurance company has been in business more than 130 years and is rated A (Excellent) by AM Best and AA- (Very Strong) by Standard & Poor’s.
- Eligible for ages 40 to 80;
- Minimum deposit of $10,000, with a maximum deposit of $300,000.
Annuity/LTC Combo versus CD
Let me share with you an example to further illustrate the power of this amazing LTC combo annuity:
Twin brothers, James and Larry, each inherit $100,000 at age 65 and are in a 28% tax bracket.
- James invests his $100,000 in CDs paying 2% annually.
- Larry invests his $100,000 in the new LTC combo annuity.
Ten years later while on a fishing trip, their boat is struck by lightning and the brothers sustain injuries that prevent them from performing two of the six activities of daily living. The CDs that James purchased grew to a pool of $115,370, after taxes. Larry’s LTC annuity, on the other hand, grew to a pool of cash totaling a whopping $732,082, all available tax-free!
With the average cost of long-term care topping $65,000 per year for the brothers, James spent all his CDs’ funds in less than 2 years and had to go on Medicaid. On the other hand, Larry received, for 11 years over $5,500 per month that was applied toward any long term care expense, a trip to Tahiti or anything he wanted because no receipts are required to receive payment.
Vanishing Retirement Benefits
The reality today is that you or someone you may know could be one of the unfortunate people who has lost or ultimately will lose retirement benefits, life insurance, medical coverage and even dental care. American companies that offered generous benefits to their unionized and salaried retirees have cut back dramatically and put their former employees and spouses into sometimes dire situations. Once expecting to live out their last years without financial worry, many people now fret about unexpected expenses.
For example, tens of thousands of GM retirees and their families have been staggered in recent months by the company’s reorganization efforts, according to an article in the Detroit Free Press on September 28, 2009. Retirees watched as their health insurance, extended care coverage and other benefits disappeared, while their life insurance crumbled. Retirement now is anything but carefree for people who once thought decades of work, combined with reasonable spending, would position them well in their latter years.
Every day, millions of Americans provide unpaid help to adult family members and friends (usually parents or grandparents) who can no longer bathe themselves, prepare meals, or do other daily tasks that most of us take for granted. The AARP study, “Valuing the Invaluable: A New Look at the Economic Value of Family Caregiving,” found that the contributions of family caregivers often go unnoticed. However, their contributions are the backbone of the nation’s long-term care system with an estimated economic value of $350 billion in 2006.
By comparison, $350 billion dollars is:
- As much as the total spending for the Medicare program ($342 billion in 2005).
- More than the total spending for Medicaid, including both medical and long-term care services ($300 billion in 2005).
- More than the amount of the U.S. budget deficit ($248 billion in FY 2006). Source: AARP.org | 2007-06-22
Call to Action:
To request a personalized analysis of illustrating how this “exploding-value” annuity/LTC combo might help you simply complete the Application Kit Request Form below. You also are welcome to call us direct if you want to know the name of the insurance carrier that is offering this amazing annuity. I am familiar with the company and its financial stability, so I can recommend this insurer to you with utmost confidence. We look forward to helping you.
I am delighted to be able to offer such a practical product for the real-world expenses that increased longevity presents today and in the future. This annuity could give you the peace of mind to let you enjoy the rest of your life – knowing that you’re long-term care needs are addressed with an “exploding-value” annuity that did not exist until now.