This is an option I'm just learning about & I'm curious. Any pitfalls? (I've talked to a company that brokers this type of deal, but I am pretty sure they won't share the downside.) Thanks for any advice/experience you might care to share.
Hi Pam and Blannie, yes, I learned about the option via this site. I am hoping someone will chime in with a personal experience. Thanks and happy holidays!
The Pension Protection Act of 2006 added additional flexibility to Internal Revenue Code 1035. Applying these concepts allows annuity contract owners and life insurance policy owners to purchase a new product by using the money inside of their old products...
Combination Life and Long Term Care Insurance policies provide long term care benefits if you need long term care or a death benefit if you die without needing long term care; or both. Combination policies provide guaranteed benefits with guaranteed rates (your rates can never be increased). This link provides an example of a Combination policy with Lifetime Benefits:
For someone who already needs care and doesn't have LTC insurance, it's a great idea to convert their life insurance policy into a stream of income to help pay for the cost of their care.
The problem is that most life insurance policies owned by seniors today have too low of a death benefit. The conversion doesn't generate very much cash flow.
Aaron S., AIF, CFA, MBA
Aaron S. AIF, CFA, MBA
The problem is that most life insurance policies owned by seniors today have too low of a death benefit. The conversion doesn't generate very much cash flow.