PENSION PROTECTION ACT OF 2006 effects on LTC!

Here's some good news for people who have annuities who are trying to find ways to fund LTC expenses. The PPA of 2006 has specific provisions that took effect 1-1-2010 which provides new opportunities for LTC planning. In particular:

  • Cash value withdrawals from certain* non-qualified annuities which are used to pay for LTC expenses, OR for HIPAA tax-qualified LTC insurance premiums, will no longer be considered taxable income, regardless of tax basis!
  • Qualified LTC insurance can now be added to annuity contracts!

Only a handful of products available today are already meeting the requirements above, but WE HAVE THEM!  And, if your client has a non-qualified annuity that is coming up for renewal, and does NOT meet the requirements, you have a great opportunity to talk to them about doing a 1035 tax-free exchange of their current values into one of the new ones! It can generate a much higher benefit than regular annuities when used for LTC expenses, so you need to give us a call when you have a situation like this coming up.

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