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Annuities And LTC

Annuities and Long Term Care


Annuity Savings and Long Term Care Protection -Together in One Plan


As part of our financial services offered at John Harman CPA, we help many families in the communities of McKinney, Allen, Frisco, Prosper, Fairview, Princeton, Melissa and the surrounding towns with long term care choices. Over the last few years there has been a public outcry for creation of a long term care product that would provide both a savings element and a protection element so that if you never needed long term care, you’d at least get a portion of your money back should you never use the coverage.  

Two popular alternatives were created, one with life insurance (known as hybrid life insurance) and the other with an annuity (known as linked benefit or asset based insurance). Today I want to address annuities and LTC.

There are two annuities with LTC that can provide access to long term care benefits along with helping you pay for in-home care. One of these annuities you need to buy before your need care (deferred), one you can buy after you need care (immediate).

If you’re looking for a way to leverage some of your investments and protect against the risk of expensive long term care, then you’ve come to the right place. Perhaps you’ve applied for LTC and been turned down, or maybe your present health prevents you from qualifying. If so this alternative can help you avoid spending down your nest egg while providing for your long term care needs.

You may be asking yourself, “Who would need such a plan?” The best candidate for these types of annuities, are:

  • A person who is uninsurable for regular LTC or Hybrid Life/LTC.
  • A person who already needs care.
  • A person with an existing annuity(ies) that can transfer money to an new annuity with LTC benefits without paying capital gains tax.

The Cost of Waiting to Buy Long Term Care Insurance


You may be thinking that you’re healthy now and won’t need to worry about this planning. If so, consider the impact that time has on the cost of procrastinating. Each year you wait the costs increase. Premiums are based on age and benefits. As you get older, your risk of needing long term care becomes greater. The longer you wait to insure yourself for long term care, the greater the total cost can be.  Should your health change for the worse, you may be forced to self insure using your own savings. There goes your nest egg and then you have to rely on the government.


The only thing protecting you now is your health, which could change at any time. Once your health changes, your entire plan changes, and the lives of those close to you.

This decision really comes down to protecting your lifestyle and at John Harman CPA, we are here to help you make the right decisions, protecting your family, your savings, and taxes. Give us a call and let us help you design a plan that will ensure you don’t leave any of this to chance. It doesn’t cost anything to talk, but I can assure you the time we spend will be one of the best investments you make.

Call 469-742-0283 today and I’ll be happy to meet with you to discuss all your questions.

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