Indexed Annuities with Good LTC Benefits?

[ltcadviser]

Are there any indexed annuities that also offer compelling LTC benefits? State Life is introducing one in October; probably will not be as compelling for LTC as the current State Life Annuity Care offerings, but are there any other indexed annuity products that do LTC well, while possibly also allowing for greater accumulation of cash value?

 

[scagnt83]

Not in the sense that I think you want. They do not offer traditional style LTCI.

But they do offer income enhancement on their Lifetime Income Riders. There are a few that will double the guaranteed income for LTC events.

F&G doubles if you cant permanently perform 2 of the 6 ADLs.

Phoenix Life gives a 50%-150% increase for 2 of 6 ADLs, depending on how long the contract has been in force.

Allianz doubles for confinement in a nursing home, assisted living or hospital for 90 days.

AE does a 50% increase if I remember right.

Most of these increases are for 4-5 years. But for a $50k income, doubling it makes a $200k-$250k bucket of LTC money, and thats on top of the existing $50k income that may or may not be available for LTC use.

So you can certainly combine the use of these Riders with other forms of LTC protection. The way I look at it, the client must create an income from somewhere... it might as well include LTC protection if it can.

 

[ltcadviser]

Not in the sense that I think you want. They do not offer traditional style LTCI.

But they do offer income enhancement on their Lifetime Income Riders. There are a few that will double the guaranteed income for LTC events.

F&G doubles if you cant permanently perform 2 of the 6 ADLs.

Phoenix Life gives a 50%-150% increase for 2 of 6 ADLs, depending on how long the contract has been in force.

Allianz doubles for confinement in a nursing home, assisted living or hospital for 90 days.

AE does a 50% increase if I remember right.

Most of these increases are for 4-5 years. But for a $50k income, doubling it makes a $200k-$250k bucket of LTC money, and thats on top of the existing $50k income that may or may not be available for LTC use.

So you can certainly combine the use of these Riders with other forms of LTC protection. The way I look at it, the client must create an income from somewhere... it might as well include LTC protection if it can.

Which companies do not require LTC needs to be permanent?

 

[scagnt83]

Which companies do not require LTC needs to be permanent?

I think F&G is the only one. But I would have to double check.

 

[ltcadviser]

I think F&G is the only one. But I would have to double check.

Thanks.

Looking at pdf brochure of F&G index annuities right now--says permanent in brochure.

Meeting with a couple in SC this week. The State Life AC II contract will provide $11,000 month of LTC benefits for 5 years or for 8 years if $265k is deposited. The growth of the cv will only be 1-2%. A banker showed them an LFG IA which made no sense to me, especially if they expressed LTC concerns. Due to health, a traditional LTC policy won't work at all. It appears State Life AC II is best option, but if they want accumulation I guess I need a backup. Maybe F&G might be the only option?

 

[scagnt83]

Thanks.

Looking at pdf brochure of F&G index annuities right now--says permanent in brochure.

I meant that F&G is the only one that requires permanent impairment. But looking at AE they do too, and they only give a 50% increase.

Athene also doubles but they require permanent impairment.



Phoenix Life is just a 90 day elim for 2 of 6 ADLs. It does not have to be permanent. They double the income.

Allianz doubles for 90 days out of 120 consecutive days. But it would not cover home care, they must be in a facility or hospital.

All of these are available in SC.


Phoenix, F&G, and Allianz probably give you the best combo of accumulation and LTC benefit.

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A banker showed them an LFG IA which made no sense to me, especially if they expressed LTC concerns.

I actually forgot about them. LFG offers 10% of the income base if you enter a Nursing Home, but its strictly for nursing home care, not assisted living. 10% is essentially double more or less depending on the age they start the income.

So it does make sense, but not as much as other options. Plus LFG has really low Caps at the moment so the better LTC options have a greater accumulation chance too.


Its important to note that the Income Stream must be started BEFORE the LTC event; 1-5 depending on the product if I remember right.

So the way to position this is to replace a portion of their current income stream with the income from the Rider.

How old are they?

What part of SC?

 

[ltcadviser]

I meant that F&G is the only one that requires permanent impairment. But looking at AE they do too, and they only give a 50% increase.

Athene also doubles but they require permanent impairment.



Phoenix Life is just a 90 day elim for 2 of 6 ADLs. It does not have to be permanent. They double the income.

Allianz doubles for 90 days out of 120 consecutive days. But it would not cover home care, they must be in a facility or hospital.

All of these are available in SC.


Phoenix, F&G, and Allianz probably give you the best combo of accumulation and LTC benefit.

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I actually forgot about them. LFG offers 10% of the income base if you enter a Nursing Home, but its strictly for nursing home care, not assisted living. 10% is essentially double more or less depending on the age they start the income.

So it does make sense, but not as much as other options. Plus LFG has really low Caps at the moment so the better LTC options have a greater accumulation chance too.


Its important to note that the Income Stream must be started BEFORE the LTC event; 1-5 depending on the product if I remember right.

So the way to position this is to replace a portion of their current income stream with the income from the Rider.

How old are they?

What part of SC?

Age 68/65. Upstate. Husband has JH LTC. Wife can not qualify for traditional ltc. Needs hybrid. Not sure they need nor want income?

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How can I get software to run Phoenix illustrations? Any recommended FMOs to contact to get appointed?

 

[scagnt83]

Age 68/65. Upstate. Husband has JH LTC. Wife can not qualify for traditional ltc. Needs hybrid. Not sure they need nor want income?

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How can I get software to run Phoenix illustrations? Any recommended FMOs to contact to get appointed?

Well if you are using an income rider to hedge LTC costs you need to replace a portion of their current income with the Rider Income. So you will need to dig into their cash flow and see what the best source of funds is to accomplish this. It is most likely qualified money of some type.

But since this is your second option I wouldnt worry about that until you have to cross that bridge.
Also, with this product (Personal Protection Choice), I would not expect more than 2-3% per year. 4%-6% in a bull market if you use a monthly Point to point strategy (which I would not put all of the funds in just that one strategy).

So if growth becomes a problem you might want to pivot to Allianz or F&G.


Out of curiosity, how many LTC claims are for permanent impairments?

 

[ltcadviser]

Ended up writing AC II. $165k will buy $85,000 year $700,000 pool of money LTC for 8 year benefit period. Its a good deal for type 1 diabetic

 

[Tahoe Ray]

Ended up writing AC II. $165k will buy $85,000 year $700,000 pool of money LTC for 8 year benefit period. Its a good deal for type 1 diabetic

165k or 265k? Either way, a likely good deal for the client (especially if you only did 165k). You could generate more LTC income from the FIA (assuming 265K) at a typical "need age" (e.g. age 85) however, like inflation riders on the hybrid single pay ULs, there is a crossover point.

If she needs LTC income earlier, ACII will win. If she needs LTC for a typical (3-4yr) period, it would be close. Only if she needed extended care (10+ years) at a later age (85+) would the FIA (like F&G) be superior.

Bottom line, you insured the primary need (LTC) for the more damaging scenarios.