Using Qualified Funds for Hybrid Long-Term Care Insurance
When you started your 401k, IRA, or 403b, you started it intending to fund your retirement. However, what if I told you that you can transfer these assets to fund a Hybrid Long-Term Care Insurance policy?
That’s right! You can use assets from your retirement accounts to fund your Hybrid Long-Term Care Insurance!
Some folks have assets in places such as CD’s, money market accounts, or mutual funds. However, for many, much of their assets are in their 401k, IRA, or 403b. Therefore, why not give them the option to use a portion of that money fund Hybrid Long-Term Care insurance?
Well, as of today, OneAmerica’s AssetCare allows you to use a portion of your 401k, IRA, 0r 403b as a premium deposit for you Hybrid Long-Term Care insurance policy!
OneAmerica, which has underwritten asset based policies for the last 30 years, is the only insurance company offering a hybrid LTC product that allows you to use qualified funds.
As a Hybrid Long-term Care Insurance product, OneAmerica’s AssetCare is well-known for its joint policies for couples and its lifetime long-term care benefits!
Therefore, not only do they offer the flexibility of allowing you to use your 401k, IRA, 0r 403b, but they also offer a great hybrid long-term care insurance product!
In addition, not only do they make it possible to use your 4o1k, IRA, or 403b assets for Hybrid Long-Term Care Insurance, but they also make the process easy for you.
Therefore, let me go ahead explain the benefits of OneAmerica’s AssetCare and from there, explain how this product makes it all possible!
What Is OneAmerica’s Asset Care?
OneAmerica’s Asset Care is a qualified long-term care insurance rider on a whole life insurance chassis. As an Asset based LTC product, OneAmerica’s Asset Care provides the following benefits:
- It pays for long-term care services if you need care
- If care is never needed, the asset passes onto your heirs creating a legacy
- It offers the option to return your premium to you if you ever change your mind.
In addition to this, OneAmerica’s Asset Care is the only Hybrid Long-Term Care Insurance that offers joint policies for married couples and the option for lifetime benefits!
With joint policies, a husband and wife can apply for a policy on a single application and receive coverage for both spouses.
In addition to this, lifetime benefits can provide an Unlimited Long-Term Care Benefit pool for both spouses! You can never outlive your benefits! Benefits will be provided for all qualified long-term care expenses so long as the insured is alive.
With such great flexibility and long-term care protection benefits, these policies are very rarely ever canceled.
How To Qualify For OneAmerica’s Asset Care Using A 401k, IRA, or 403b
In order to qualify for OneAmerica’s Asset Care using retirement accounts and qualified funds, you must be between the ages of 59 1/2 – 80.
You may apply as a single individual or you may apply jointly.
Examples of qualified funds or retirement accounts used to fund OneAmerica’s Asset Care include a 401k, IRA, and 403b (sometimes referred to as a TSA).
This method uses a lump-sum of your assets to fund a single premium payment on OneAmerica’s Asset Care policy.
You are basically re-purposing your money so that you may be able to pay for long-term care services in the future if needed.
How Does Using A 401k, IRA, or 403b to Fund OneAmerica’s Asset Care Work?
When using assets from a 401k, IRA, or 403b, Asset Care becomes an annuity-funded whole life hybrid insurance policy.
Now that’s alot of words! Therefore, let me explain the how this policy works.
First, an individual must apply and get approved for an Asset Care policy. Once approved, a lump sum of your 401k, IRA, or 403b assets will be rolled over into a deferred fixed-interest annuity with OneAmerica.
Once received, OneAmerica will add a 20% premium bonus into the account. For example, if you rollover $150,000, OneAmerica will add $30,000 ($150,000 x 20%) giving you a total of $180,000 to apply towards your policy.
This annuity is then used by OneAmerica to pay the premium on your Hybrid Long-Term Care insurance.
Using annuity withdrawals from the annuity, OneAmerica will automatically pay your hybrid policy’s premiums over a period of 10 years.
(I will explain the benefits of the 10-pay design later in the article.)
All of this is accomplished using a one-time application and approval process! OneAmerica does all the legwork for you.
The end result for you is a pool of tax-free money created for qualified long-term care expenses!
In addition, OneAmerica’s AssetCare also provides a death benefit in the event you don’t need long-term care services! Hence, your unused assets will be returned to your loved ones leaving a legacy if you never need care.
Now, let’s look at an example of how this all works.
Example of Using a 401k, IRA or 403b to Fund OneAmerica’s Asset Care
For our example, we will use a married 61 year old male and 60 year old female applying for a joint policy.
This couple is looking to move $150,000 from their IRA to fund their Asset Care policy.
Below is an illustration. To make things easier, I highlighted the areas of importance –
First, you will see this is a OneAmerica “Asset Care Annuity Funding Whole Life.”
It has a single pay annuity premium of $150,000 and provides $5,287 in monthly LTC benefits per person. The Total LTC Benefit Balance is Unlimited and the policy has a Face Amount of $176,246.
Simply put, this means our couple will move $150,000 from their IRA into a OneAmerica annuity used to fund their Asset Care policy.
In return, they will each receive an unlimited $5,287 in monthly LTC benefits for qualified long-term care expenses!
In addition, if they pass away without needing long-term care, their loved ones can receive a death benefit of $176,246!
Both benefits offer the couple more than what they put into the policy!
Now let’s look at how the annuity pays the policy premiums once the policy is in-force:
Once the policy is in-force, annuity withdrawals will be used to pay annual premiums of $18,000 over 10 years.
Now mathematically, something does not sound correct. How can the couples $150,000 deposit pay $18,000 in premiums for the next 10 years?
Remember, OneAmerica adds a 20% bonus premium to your account once funds are received. Therefore, your $150,000 becomes $180,000 and can now cover the required premiums.
So what is the benefit of the premium being paid over 10 years? Well, this is done to help spread out taxes. Let’s briefly discuss the tax implications of using qualified funds and how OneAmerica works it out in your favor.
Now your 401k, IRA, and 403b are funded with “pre-tax” dollars. Therefore, once any withdrawals take place, whether it be to pay you in retirement or to pay hybrid LTC insurance premiums, you must pay taxes on this money.
Therefore, rather than create a large taxable event by paying your policy premium in one lump-sum payment, OneAmerica uses annuity withdrawals to pay your premium over 10 years.
By doing it this way, you avoid a large tax bill at the end of the year. Your taxes are spread over 10 years thus making the taxes due more manageable for you.
Using our example from earlier, instead of the couple paying taxes on $180,000 at one time (which may be catastrophic) they would pay taxes on $18,000 each year for the next 10 years.
Conclusion – 4o1k’s, IRA’s, & 403b’s With OneAmerica’s Asset Care Is The Perfect Match
OneAmerica’s AssetCare is the perfect product to move your qualified assets into in order to obtain a Hybrid Long-Term Care insurance product!
The necessary funds to fund Hybrid Long-Term Care insurance are not always available in a CD or savings account. In some cases, you may have more than enough assets in your 401k, IRA, or 403b to cover your retirement AND fund a Hybrid Long-Term Care Insurance policy.
This is where OneAmerica’s AssetCare policy comes in to play. If your assets are mostly in your retirement accounts & you want Hybrid Long-Term Care Insurance, than get OneAmerica’s Asset Care!
Request A Free Quote Today!
For a free quote using 401k, IRA, or 403b funds with OneAmerica’s Asset Care, call today at 1(800) 498-3955 or request a FREE quote below!