Call (800) 325-8166 to speak to a Long-Term Care Specialist
Straightforward strategies for your specific LTC needs
LONG TERM CARE SOLUTIONS
As a family physician, you understand the profound impact that illness, accidents, or aging can have on a family. Long-term care insurance is crucial. We can help you identify the right approach and secure funding to cover the costs associated with the care you may need, which is often not included in traditional health insurance or Medicare coverage.
Finding the Funds for LTC
Three protection solutions with the critical assistance families need
Speak to an Insurance Specialist, call (800) 325-8166
Using a Traditional Policy to Plan for Long-Term Care
The Background
Between the ages of 40 and 75, there are many demands on your income. In addition to managing your mortgage, raising kids, and saving for retirement, it’s also the best time to plan for long-term care, while you’re still younger and healthier than you ever will be again. Though it might seem like just another thing to worry about on an already full plate, making a plan now can help eliminate that burden in the future.
Client Profile
Sara, age 48, has a thriving family practice. She and her husband, Matt, age 49, have raised two children who are on their own. They plan to work until at least 67 before retirement.
Additionally:
Additionally:
- Both are healthy with no major concerns
- They are concerned about how a long-term care event could deplete their income in retirement
- They already have life insurance in place for their children
- They want to spread out payments over their lifetime
How it Works
Both Sara and Matt apply for a traditional Mutual of Omaha policy. They are fully underwritten and each qualify for the Select rate class. The total annual premium for both is $4,728, with each spouses’ portion payable until they start receiving benefits.
The policy includes:
The policy includes:
- A monthly benefit for each spouse of $5,000, which grows by 3% compound for the first 20 years
- A 4-year benefit period for each that can be shared by the other spouse
- A 90-day wait after they qualify for care before benefits start
Results
Their $4,728 annual premium offers each of them a starting long-term care benefit of $240,000. After 20 years, they’ve paid a combined total of $94,560 in premiums and EACH of them has a total bucket of $433,467 (or $866,934 combined) to use for long-term care. With that need solved, they can be confident that their income won’t be eroded by unexpected health concerns.
Using Qualified Funds for an Asset-Based Plan
The Background
For those between the ages of 40 and 75, nearing retirement often means having assets tied
up in qualified funds like an IRA or 401(k). When these assets aren’t needed for retirement income, they can be an
excellent way to fund a long-term care plan. Plus, if passing unused benefits on to heirs is important to you, an
asset-based long-term care plan can achieve both goals.
Client Profile
Jim, a doctor, age 64, and his wife, Ann, age 62 are interested in planning for LTC. Because
both are over age 59 ½, there’s no penalty for withdrawing funds, but there are taxes.
Additionally:
Additionally:
- Jim has an IRA worth $225,000 that they don’t need for income
- Jim and Ann are in good health and willing to go through underwriting
- Jim and Ann are concerned about taking a big withdrawal and paying for all taxes at once
How it Works
First, Jim and Ann’s advisor exchanged their current qualified funds for a OneAmerica
qualified annuity. They also applied for a OneAmerica Asset Care policy that offers long-term care benefits as well
as a death benefit. Both Jim and Ann were fully underwritten and qualified for coverage.
Jim and Ann’s benefits include:
Jim and Ann’s benefits include:
- A face amount of $272,687 to be paid tax-free to heirs if not used for long-term care
- A shared long-term care benefit of $16,361
- An annual premium of $28,125 due for 10 years, covered by the new qualified annuity
Results
By using the qualified annuity to pay the Asset Care policy over 10 years, the only
out-of-pocket expense to Jim and Ann was taxes on the withdrawals. In addition, the OneAmerica qualified annuity
offered a 25% bonus to offset those taxes. Even if they don’t need long-term care, they have created a tax-free
death benefit to pass to their heirs. And, if they do need long-term care, they have a monthly benefit available for
the entire life of each spouse.
Ask us about how this strategy could also be funded with a cash value life insurance policy or a non-qualified annuity.
Ask us about how this strategy could also be funded with a cash value life insurance policy or a non-qualified annuity.
Using Annuity-Based Long-Term Care Planning
The Background
At ages 70 to 87, you might find yourself considering long-term care options for the first
time. While premiums for traditional or asset-based plans can be higher at this stage, and health concerns may
affect your eligibility, there are still viable options. You may prefer not to take on regular premium payments, but
an annuity-based plan could offer a way to leverage your existing assets for long-term care coverage.
Client Profile
Ms. Garcia, age 72, was recently widowed. Although she doesn’t currently have any health
concerns and is financially sound, she is concerned that a long-term care need could derail her retirement plans.
Ms. Garcia has a non-qualified annuity that she no longer needs for income. This annuity:
Ms. Garcia has a non-qualified annuity that she no longer needs for income. This annuity:
- Is worth $200,000, having doubled from her initial deposit of $100,000
- Is past the surrender period
- Contains $100,000 of deferred gains which would be taxed if withdrawn
How it Works
Ms. Garcia uses a 1035 exchange to move the $200,000 from her nonqualified annuity to an
Annuity Care II plan. The plan includes a continuation of benefits rider offering additional funds for long-term
care. Ms. Garcia answered a few simple underwriting questions and was able to qualify for coverage without needing
doctor’s records or medical exams.
The Annuity Care II plan offers Ms. Garcia:
The Annuity Care II plan offers Ms. Garcia:
- Total long-term care benefits of $545,940
- A monthly tax-free benefit of $9,099 for long-term care for 5 years
- A cash surrender value OR death benefit of $209,976, available if she doesn’t use all the long-term care benefits
Results
With no additional out-of-pocket or tax expenses, Ms. Garcia was able to exchange her
non-qualified annuity for a plan that offered her more than two times leverage on her initial asset. And should she
not need long-term care, her beneficiaries would still receive more than $209,000 in inheritance.
Ask us about how this strategy could also be funded with a cash value life insurance policy or a qualified annuity.
Ask us about how this strategy could also be funded with a cash value life insurance policy or a qualified annuity.
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PERSONAL CONSULTATION.
PERSONAL CONSULTATION.
Contact Information
AAFP Insurance Services
Attn: Policyholder Services
PO Box 7470
Leawood, KS 66207-0470
Phone:
(800) 325-8166
Email Us
Hours of Operation
Monday through Friday
8:30 AM – 4:30 PM Central Time
We’re here to help
ADDITIONAL INSURANCE OPTIONS
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