Indexed Annuity Care Sales Idea
Here is a good sales idea for May on Indexed Annuity Care. Recent increases to our guaranteed interest rates have opened the door to a new client value proposition we haven’t seen in years.
Premise: Design Indexed Annuity-Care with an annual-pay rider where the cost of the continuation of benefits (COB) rider is re-couped each year through the guaranteed interest earned.
Example: Single female, age 70
- Repositions $200k of idle cash or 1035 of existing non-qualified annuity + $5,834 annual premiums to cover the lifetime COB rider.
- This creates $8,417/ month of LTC benefit that is TAX FREE and can never be exhausted.
Here’s where the additional value now comes into play: Looking at the GUARANTEED ledger below, notice that in any given year the “account value” exceeds the total premium paid into the policy. In other words, the cash value’s guaranteed growth earns back the annual COB premium. Also remember that the COB premium can potentially be either deducted as LTCi premiums if the IRS parameters are met in any given year OR one could use an HSA to fund the COB tax free up to the age-related cap.
Say this woman lived to be 85 without ever needing care:
- She’s repositioned $200k into the base policy
- She’s contributed $88k into the COB rider
- Worst case scenario: her heirs receive $308k which means they’ve essentially recovered all of the premium while she still benefitted by having a lifetime LTC policy in place.
This is a powerful way to put “legacy-minded” clients at ease!