One concern for those who purchase long term care insurance is that they might not need to use their policy in their lifetime.
Then years of premiums would have been paid for no return.
For older persons who care considering purchasing an annuity the concern is that they will not live long enough to receive a significant amount of their annuity income.
A new kind of annuity addresses both of those concerns: annuities with long term care benefits.
Many buy an annuity to secure a stable retirement income.
This new kind of annuity adds on coverage for long term care.
Long term care is used for a person who becomes unable to care for themselves and needs assistance.
This assistance might in their home, daycare, or nursing home care.
The coverage is paid for by the investment return from the annuity.
There are two different ways that an insurance company will set up this kind of annuity.
The first is an annuity that has no medical underwriting.
This means that anyone can obtain LTC benefits with having to prove that they are in good health.
These policies do not usually have benefits that are as high as a medically underwritten policy.
For an annuity that requires medical underwriting, the purchaser would have to answer health questions and might also have to undergo a physical examination to obtain the coverage.
Once approved the benefits are likely to be higher, though, because of the underwriting process.
The coverage level for the LTC is determined at the time of purchase.
The insurer may offer a benefit that is two or three times the value of the annuity that is paid out over a few years.
For example, if someone purchased a $150,000 annuity and chosen a benefit limit of 200% over a two year period then up to $150,000 would be paid out for long term care even if the annuity is exhausted.
As of the beginning of 2010 LTC benefits that are from an annuity are now tax free, thanks to the Pension Protection Act of 2006.
Also the premium for an annuity with LTC can be paid with pretax dollars.
These tax benefits make these annuities even more attractive to consumers.
Annuities are funded with a one-time premium.
This means that you must pay the amount of the entire annuity at the time of purchase.
The LTC coverage level is dependent on this amount so the purchaser must make sure he buys enough coverage to cover his healthcare assistance if he should need it.
The advantage is that if you buy an annuity then you are guaranteed a monthly income for the rest of your life.
With LTC insurance you may pay years of premiums for benefits you never need.
Deciding if annuities with long term care benefits are right for you is a matter of determining if you have a lump sum to pay the premium, calculating how much of your retirement and healthcare you can afford to pay without insurance, and coordinating this product with your other investment and retirement strategies.
Then years of premiums would have been paid for no return.
For older persons who care considering purchasing an annuity the concern is that they will not live long enough to receive a significant amount of their annuity income.
A new kind of annuity addresses both of those concerns: annuities with long term care benefits.
Many buy an annuity to secure a stable retirement income.
This new kind of annuity adds on coverage for long term care.
Long term care is used for a person who becomes unable to care for themselves and needs assistance.
This assistance might in their home, daycare, or nursing home care.
The coverage is paid for by the investment return from the annuity.
There are two different ways that an insurance company will set up this kind of annuity.
The first is an annuity that has no medical underwriting.
This means that anyone can obtain LTC benefits with having to prove that they are in good health.
These policies do not usually have benefits that are as high as a medically underwritten policy.
For an annuity that requires medical underwriting, the purchaser would have to answer health questions and might also have to undergo a physical examination to obtain the coverage.
Once approved the benefits are likely to be higher, though, because of the underwriting process.
The coverage level for the LTC is determined at the time of purchase.
The insurer may offer a benefit that is two or three times the value of the annuity that is paid out over a few years.
For example, if someone purchased a $150,000 annuity and chosen a benefit limit of 200% over a two year period then up to $150,000 would be paid out for long term care even if the annuity is exhausted.
As of the beginning of 2010 LTC benefits that are from an annuity are now tax free, thanks to the Pension Protection Act of 2006.
Also the premium for an annuity with LTC can be paid with pretax dollars.
These tax benefits make these annuities even more attractive to consumers.
Annuities are funded with a one-time premium.
This means that you must pay the amount of the entire annuity at the time of purchase.
The LTC coverage level is dependent on this amount so the purchaser must make sure he buys enough coverage to cover his healthcare assistance if he should need it.
The advantage is that if you buy an annuity then you are guaranteed a monthly income for the rest of your life.
With LTC insurance you may pay years of premiums for benefits you never need.
Deciding if annuities with long term care benefits are right for you is a matter of determining if you have a lump sum to pay the premium, calculating how much of your retirement and healthcare you can afford to pay without insurance, and coordinating this product with your other investment and retirement strategies.
