What Are LTC Annuities?
LTC annuities are fixed or fixed-indexed annuities that include a long term care benefit rider. They allow you to reposition existing assets—like CDs, savings accounts, or non-qualified investments—into a product that provides both retirement income and long term care protection.
Under the Pension Protection Act of 2006, withdrawals from these annuities used to pay for qualified long term care expenses are generally tax-free, making them an attractive option for those looking to maximize their care dollars.
Key Benefits
Tax-Advantaged Benefits
LTC benefits paid from qualified annuities are generally income tax-free under federal law.
Asset Growth
Your principal grows tax-deferred, potentially increasing your available care benefits over time.
Leverage Your Assets
Many policies offer 2x or 3x benefit multipliers, turning $100,000 into $200,000-$300,000 in care coverage.
No Use-It-Or-Lose-It
If you never need care, your annuity value passes to beneficiaries or can be annuitized for income.
Who Should Consider LTC Annuities?
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Those with existing assets in low-yielding CDs, savings accounts, or money market funds looking for better returns with added protection.
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People who may not qualify for traditional LTC insurance due to health conditions—annuities often have simplified underwriting.
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Those who want flexibility and the ability to access their money if care is never needed.
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Individuals seeking tax efficiency who want to maximize their care dollars through tax-free LTC withdrawals.
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