Sign of the Times: Annuity Product w/ LTC Rider

According to the National Underwriter‘s article “Annuity With LTC Rider Debuts,” Genworth Financial Inc. has a new annuity product to introduce.  The Total Living Coverage Annuity is a linked-benefit policy linking this single premium non-qualified deferred annuity and a long term care insurance rider.  Genworth Life Insurance Company is the underwriter.  This annuity contract enables investors to buy long term care insurance that is up to three times the amount of their single premium by using their annuity value.  By doing this, they essentially have a “pool of benefit dollars for their LTC expenses.”  Once a claim is filed, benefits come first from the annuity value and then out of the pool that remains.

The Pension Protection Act of 2006 makes the LTC claim payments tax-free for the investor.  It may also be possible for some consumers to purchase the policy with a tax-free 1035 exchange from an annuity or life policy they already have.  Some of the highlighted annuity features include LTC coverage that is renewable and guaranteed, a simplified underwriting process, inflation protection as an optional addition, and the waiver of a monthly provision for LTC charges.  This new product is one of the best annuities for people with assets over $200,000 to protect that are near or in retirement, know that the need for LTC could be in their future and could financially hurt them if not insured against, and are already self-insuring against the LTC risk for their future.

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