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Hybrid long-term care annuities may protect retirement income 2010-05-06 Long-term care can be extremely expensive to retirees. However, many Americans are hesitant to purchase a policy they may never use. Hybrid policies, which combine annuities with a long-term care option, may benefit retirees who don't want to gamble their retirement income on a future illness. Most long-term care annuities allow consumers to invest a minimum amount, usually $50,000, into an annuity and choose an amount they think is sufficient for LTC coverage, which typically amounts to 200 or 300 percent of the annuity value, according to Bankrate.com. Under a 1035 exchange, individuals can fund this type of annuity with another annuity or a life insurance policy that they no longer need, according to the Internal Revenue Service. For those who never require LTC, the annuity can be redeemed after a 20-year period at its accumulated value, Bankrate.com reports. "When you think about how to pay for long-term care in the future, most people don't automatically think of annuities," Mutual of Omaha Product Performance director Yuri Veomett told the North American Precis Syndicate. "Hybrid annuities, however, can be an appealing option," Veomett commented. Retirees should take future needs into account when planning for retirement to protect their income.  |
