Mark Fitzgerald, national sales manager for Saybrus Partners, Phoenix's distribution subsidiary, explained in a release detailing the survey results that while lifetime income remains a top priority for consumers and advisors alike, other preferences, such as accumulation and chronic-care benefits, are taking precedence as well, leading to the prediction that
combination annuity products stand to increase in value.
Effective January 1, 2010, this applies to new
combination annuity contracts as well as older contracts that are exchanged into new combination annuities with long term care.
More and more, consumers are looking to meet other needs, notably accumulation and chronic care benefits, and would like the ease of a
combination annuity product that does it all.
With that in mind, it might be worth steering clients toward a so-called
combination annuity.
Under the combination annuity, the insured covers a material percentage, varying from 20% to 33%, of the LTC benefit via the annuity values.
In other words, the combination annuity provides a mechanism for the accumulated earnings of an annuity to be paid out income tax free.
Note: This rule applies to stand-alone and
combination annuity contracts as well.
The Pension Protection Act of 2006 includes soiree key provisions that address for the first time the taxation of
combination annuity plans featuring LTC, insurance.
FOR THE
COMBINATION annuity and long term care marketplace, 2009 will be a momentous year.
WITHOUT DOUBT, the passage of the Pension Protection Act of 2006, which extends the Health Insurance Portability and Accountability Act's favorable treatment of combination life and long term care policies to
combination annuity and LTC contracts, has been one of the most dramatic events affecting the insurance industry in years.
THE FOCUS OF insurance company
combination annuity and long term care activities since passage of the Pension Protection Act in August 2006 has focused on deferred annuity vehicles of all manner and shape.
3) Because accelerated benefits from a
combination annuity or life contract are paid earlier than they would be in the absence of such a provision, the benefits have a cost to them.
