What is Annuity Care and How Does It Work?

An annuity care long term care insurance is a **hybrid product** that combines a **deferred fixed annuity** with a **long-term care rider**. It is designed to help pay for long-term care costs without destroying retirement savings. It requires a **lump-sum deposit** into the annuity portion of the contract. The annuity provides enhanced coverage for potential long-term care expenses, usually double or triple the initial deposit¹.

The annuity can be purchased or exchanged for older nonqualified annuities without a taxable event under the Pension Protection Act. The annuity creates a fund specifically for long-term care expenses and a separate cash fund for other uses. It is available to people up to the age of 85¹.

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Source: Conversation with Bing, 7/14/2023

(1) Long Term Care Annuity: Best Long-Term Care Insurance (2022). https://www.annuityexpertadvice.com/annuity-101/long-term-care-annuity/.

(2) Long-Term Care Annuities: Pros and Cons - SmartAsset. https://smartasset.com/financial-advisor/long-term-care-annuity.

(3) Long-Term Care Annuity Rider: How It Works, Pros and Cons. https://www.annuity.org/annuities/riders/long-term-care/.

(4) Long-Term Care Annuity | Definition, Pros, Cons, & Alternatives. https://www.financestrategists.com/insurance-broker/annuity/long-term-care-annuity/.

(5) Long-Term Care Annuity: Best Long-Term Care Insurance (2023). https://www.annuityexpertadvice.com/types-of-annuities/long-term-care-annuity/.