Annuity LTCi Study Hall

Your client has an old annuity sitting on the sidelines — not growing, not earmarked for anything. Learn how annuity LTCi can turn that idle asset into meaningful long-term care coverage, even for clients who can't qualify elsewhere.

Annuity-based long-term care is one of the most underutilized tools in the LTCi planning toolkit — and one of the most accessible. In this Study Hall episode, host Jason Dutra and the Buddy Study group take a high-level tour of the annuity LTCi market: who it's designed for, why it works, and how to present it with confidence to the right clients.

The conversation covers both the strategic framework and current carrier landscape, including deep discussion of EquiTrust Bridge, Nationwide Care Matters Annuity, One America Annuity Care, and Global Atlantic ForeCare — with real case studies from advisors in the room.

We explore:

• The Pension Protection Act (PPA) and why the 1035 exchange into a 7702B LTC-qualified annuity is such a compelling tax play
• "Lazy annuity money" — how to identify existing annuities that are no longer serving a client's goals and reposition them for LTC coverage
• Why annuity LTCi often delivers better value at older ages, and why it's well-suited for clients who are asset-heavy but income-light
• The critical difference between 7702B LTC riders and ADL doublers — and why it matters for tax treatment and home care coverage
• EquiTrust Bridge's guaranteed issue underwriting and how interview preparation can maximize a client's coverage tier
• Nationwide Care Matters Annuity product deep-dive: simplified underwriting, leverage multipliers, international benefits, and the retroactive elimination period
• How carrier decline pathways are increasingly routing clients from hybrid products to annuity LTCi — and why advisors need to know this
• The referral partnership opportunity between LTCi specialists and annuity advisors

This episode is designed to help advisors:

• Identify strong annuity LTCi candidates during client fact-finding
• Understand key product distinctions across the major carriers in this space
• Present the annuity LTCi concept in a way that keeps the long-term care purpose front and center
• Leverage referral relationships with annuity specialists to expand planning opportunities

CHAPTER MARKERS

0:00 Welcome & Episode Overview

1:42 Why You Need to Think Differently About the Annuity LTC Sale

2:39 Asset Repositioning and the Pension Protection Act

5:02 The PPA Explained: 1035 Exchange and Tax-Free LTC Benefits 

7:07 Underwriting Advantages: Simplified and Guaranteed Issue Options

8:44 Case Study: Annuity LTC Value at Older Ages and Unisex Pricing

10:13 Who Financially Qualifies for Annuity LTCi

11:23 Agent Licensing: Annuity Suitability Training Requirements

12:23 Carrier Overview: One America, Global Atlantic, Nationwide, EquiTrust

14:55 7702B vs. ADL Doublers: Know What You're Selling

17:14 EquiTrust Bridge Deep Dive and Interview Prep Tips]

25:40 EquiTrust Coverage Tiers and Agent Portal Resources

28:16 Annuity LTC vs. Life Hybrid: Terminology and Key Differences

30:42 Nationwide Care Matters Annuity: Product Breakdown

38:30 Underwriting Details: 6 Questions, Multipliers, and Approval Rates

40:28 Market Momentum and What's Coming Next in Annuity LTCi

44:06 Trusting Your Carrier Specialists and Referral Partnerships

47:25 Handling Client Resistance to Annuities

49:42 Closing Thoughts and Study Hall Wrap-Up

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🔎 About Buddy Study Podcast

The Buddy Study Podcast helps insurance professionals and financial planners master Long-Term Care Insurance through case studies, expert interviews, and carrier product updates. Our goal is to help advisors become more confident, efficient, and knowledgeable when helping clients plan for long-term care.

Transcript

Welcome & Episode Overview

SPEAKER_02 0:00

Hey everyone, welcome to another edition of the Buddy Study Group. And today we are resuming our study hall series, and we are going to be talking about annuity long-term care this time around. Um, so if you all do not know or haven't been here for a study hall session, we really just take the time to from a high level um analyze one piece of the long-term care market at a time and taking it from multiple angles. So, of course, you know, talking about the major carriers and products in that marketplace, but also just um speaking about it at a high level from a conceptual standpoint, from a sales standpoint, what makes this product type stand out? Uh, what may be overlooked, or what are the key sales ideas uh of each of these markets, and uh, you know, best practices for navigating. So I'm gonna go through some of these high-level concepts, but I would also love to hear from you all. If you have um some good experience working with annuity long-term care, I would love to hear any case studies or what products you're into lately, or um just anything you have heard or or know about this marketplace so that we can all learn together. Does anybody have anything that they want to contribute before I dive right into it? Um, or any any findings to report early on. Mark, anything you want to say before we chat and kick it off here?

SPEAKER_01 1:41

Um, just what

Why You Need to Think Differently About the Annuity LTC Sale

SPEAKER_01 1:42

comes to my mind, and I'm not I wouldn't consider myself an expert in direct sales of annuity long-term care, but I do think you have to think a little differently than when you're offering like a traditional long-term care policy. Um, I think you're gonna talk about you know, Pension Protection Act and the asset repositioning. But I do think you know, a lot of clients may have that objection, even if they don't say it, that why am I getting my long-term care on an annuity policy? Just like when we see that on the life hybrid policy. So keep that in mind, I would say, when you're offering this, is even if you have a sales process that you use for long-term care, you may want to adjust that for the annuity long-term care sale if you know that that's going to be a fit for your client.

SPEAKER_02 2:25

Yeah, and you, I think, did well in alluding to one of my main talking points, which is asset repositioning, especially taking advantage of uh the PPA uh to create

Asset Repositioning and the Pension Protection Act

SPEAKER_02 2:39

a really nice sales opportunity for clients where it's the right fit. Um, but I also think from the annuity side, one of the big advantages is underwriting. So I think for clients who generally have health challenges but are financially qualified to look at annuity long-term care, and especially just taking it one layer deeper, those who have an existing annuity that's not earmarked for anything. I think the kind of key term, though it's lazy itself, is lazy annuity money. You know, uh an annuity that's maybe already sort of accomplished its goal, or um, you know, the goal that it was designed to reach, you know, isn't important, isn't necessary anymore, using that to reposition to long-term care are probably the big two pieces that I would cover um on this session. So obviously we're looking at something that is generally more geared to the senior market. So when it comes to say age ranges, I believe we have a maximum age range of about 40 to 85. Um, but you're going to be talking to many people about annuity long-term care, probably in that maybe 55 to 80 range, most of all. Um again, not just because of the age range for products, but because these folks are in a financial time in their life where it would be likely most suitable. These are folks that are nearly or already retired in many cases, that have done a good job saving, uh, and and generally have high assets, but in retirement may have sort of less income, right? So that's generally what I see as kind of our ideal client for annuity long-term care. And uh really the goal for many of these folks is they have an existing asset that can be repositioned into annuity long-term care. So, for those of you who don't know, because I know we get um some new folks on each and every session and watching the recording, the Pension Protection

The PPA Explained: 1035 Exchange and Tax-Free LTC Benefits

SPEAKER_02 5:02

Act is really the star of the show here for many annuity long-term care cases. Um, so what that is essentially going to do for us at a high level, um, the PPA says that if we were to 1035 an annuity with significant gain, but really any amount of gain into an annuity long-term care product that is specifically 7702 be long-term care qualified, if we were to take long-term care benefit out of that long-term care annuity, essentially what would have been gain in the annuity we transferred over will be received tax-free as long-term care benefit. Um, so for many folks who um really have that concern top of mind of how can I get myself to a better tax situation? How can I continue to mitigate tax risk? This is a really huge play to be able to make uh in many cases for folks. So I think that's the most existing no-brainer opportunity. And we're seeing um really a lot of carriers using that in their sales materials, obviously. Yeah, it's a it's a pretty easily printable sales idea, but even just promotion around their annuity products because of that. We saw that One America, I believe it was last year, did a a huge campaign um on their annuity care product, and that was very successful from the numbers and and got a lot of people um really in that sort of sales frame of mind. Um, but this is good for really any of the carriers out there to be able to look at this. And um just kind of moving away from that for a second and into the underwriting side of things, I think the great sales idea of the PPA combined with really light

Underwriting Advantages: Simplified and Guaranteed Issue Options

SPEAKER_02 7:07

underwriting processes relative to other product types for annuity long-term care, those those two things kind of go hand in hand, right? If it's an easy process from being able to find the money for some clients and to um get them into this plan and the ease of underwriting, ease of process, I would say there, either simplified or in the case of Equitrust Bridge, guaranteed issue underwriting. I I think those two things go hand in hand to create a really easy process for folks who we have to remember, uh, you know, historically have been harder to get long-term care solutions for. You know, these are folks who are generally 60 plus. Um, and any health issue from say a traditional or hybrid underwriting standpoint is going to be treated with a lot more scrutiny than somebody who is 10, 20 plus years their junior, right? So um we talk about this a lot when it comes to long-term care, more on the group side, but it also applies to individual. It's sometimes almost as much about process as it is about product. If it's kind of easy to access the product from an underwriting standpoint and from just a premium payment standpoint, either affordability or ease of using existing assets, uh, then we have the recipe for a pretty uh popular product on the market. Um, so I would say yeah,

Case Study: Annuity LTC Value at Older Ages and Unisex Pricing

SPEAKER_02 8:44

yeah.

SPEAKER_01 8:44

Go ahead, Mark. No, I I don't want to repeat what you said. I think you said it very well, you know, the types of sales. Um, one other though that I would mention, because actually this was um the reason my mother-in-law bought an annuity long-term care. So I had personal experience offering the product, is that she actually got the best value. And there were two reasons for that. Um, she bought it when she was approximately 75. So when you look at the life long-term care, traditional long-term care markets, you don't get as much leverage. It tends to go underwater, right? 70, 80-year-old range. Well, that annuity, because it can give you that two times or three times immediately, uh, much better value as you get closer, you know, to those older ages, and it's unisex priced. So again, because of those two factors combined, I could say, you know, that putting in the lump sum was a better value than even the recurring premium options for those other products. So I think that's another reason that you'll see these be more popular, is just the pure value itself.

SPEAKER_02 9:44

Yeah, and that brings up something that I've kind of um implied but haven't explicitly talked about, which is not all clients will financially qualify for this type of product, right? So that is really our limiting factor here when we talk about annuity long-term care. Spend some time talking about how open it is for many, but you have to have the capacity to make a single premium or 1035 exchange

Who Financially Qualifies for Annuity LTCi

SPEAKER_02 10:13

in order to qualify for this product from a financial standpoint. Okay. So that's where some folks um won't really have access to this product. Um, but again, I think we're dealing with an age group that tends to be a bit more asset heavy and income light. So you're going to find a lot of candidates for this product, regardless for the annuity long-term care market. We're not dealing with flex pays, we're not dealing generally with pay as you go premiums. I think you may see some flexibility once you have done an initial dump in um with one or two carriers. Um, but at the end of the day, that's gonna be the lever they pull to kind of control who can access the product or not. I'm I'm getting all this money up front if I'm going to offer all the other benefits that I'm offering with these products. So I would say, yep, 1035, easy peasy, agreed. Um, when it comes from or when it comes to the the agent side of things and and what do I need to be able to do to write annuity long-term care, generally these products do

Agent Licensing: Annuity Suitability Training Requirements

SPEAKER_02 11:23

come with extra annuity suitability training. Um, so that is one thing to keep in mind. Uh, if you are working with a case that is close with any carrier, make sure you check in and see if there's individualized annuity suitability training that I have to take at the carrier level and at the state level. So if you're working in a new state, that is something to pay attention to. Yes, shout out to Reged. Um, agreed.

SPEAKER_01 11:52

By the way, that is really easy as well. So don't let that stop you. Um, it's usually just check the box on these slides and you're and you're approved.

SPEAKER_02 12:00

So just a process thing, right? Like just make sure that um your case doesn't become slow as molasses because you didn't try to get these things done proactively and ahead of time. Um, because we all know that there is enough paperwork to go around beyond all that, you know. Um I think

Carrier Overview: Oneamerica, Global Atlantic, Nationwide, EquiTrust

SPEAKER_02 12:23

the major players here, I mentioned one, um America's annuity care, four care, annuity long-term care. So that is from Global Atlantic Forethought. They've got like 17,000 different names, but those are a few. Um, Nationwide's Care Matters Annuity is brand new to the market. Um, so they've been an interesting player, and I'm really interested to hear from any of you out there have you started working with Care Matters Annuity yet? I think it's uh it was a natural play for nationwide um for a number of reasons that we'll get into in a little bit. And then Equitrust Bridge is um really the product that I think has the most carved out niches, um, given the fact that it is a fixed index annuity, given the fact that it has guaranteed issue underwriting and um underwriting for uh essentially a better rate, better leverage. So it's not just guaranteed issue, everybody gets the same rate, everybody is everybody's in and included, but if you are in better health, you can qualify for better leverage. I think that's a really interesting way um to uh offer a product. And all of those products that I mentioned are Pension Protection Act eligible. Um, I would say if we're looking for similarities, bridge is the one that kind of stands alone in its design. I would say for care and care matters annuity are the most similar to each other as far as product underwriting structure of sorts. Um and with care matters annuity, you're seeing a lot of the things that you know and love uh with the care matters hybrid solutions. Um, so I think that's an interesting one. Now, I hear uh some things going on in the chat. I hear with my eyes um people talking about Equitrust.

SPEAKER_01 14:38

I'll I'll report back a little bit. Uh Chris, I think you want to get off mute and share your experience because I know you had a good experience with Equitrust. That would be great. Before you do that though, um, Jason, one other thing I want to make special mention of is there's a lot of annuities in the market that have ADL doublers.

SPEAKER_02 14:53

Yes.

SPEAKER_01 14:54

So I know we're

7702B vs. ADL Doublers: Know What You're Selling

SPEAKER_01 14:55

talking today about annuity with true long-term care writers, which makes them Pension Protection Act capable. Um, annuities with ADL doublers, just keep in mind that they can be good products as well, but the benefits are not received tax-free. So it's just a different setup there. Um, and you do have to make sure that the ADL doubler does cover home care. Most of them cover facility, only a few of them also cover home care. So if you are offering those products, we love all those products that can solve the long-term care issues. Just read the contract because if it's not 7702B, all the contracts can be different. Um, so we're gonna focus today obviously on the ones that are 7702B.

SPEAKER_02 15:35

Unbelievably important points there. And just remember the session we had with Ramona Neal that was talking about life hybrid solutions. So there are some with uh 7702B long-term care riders. There's lots of benefits that are exclusive to those types of setups, and if they have separately identifiable long-term care premiums, yada yada. But we did talk about chronic illness riders as well and the differences between them. And uh essentially, look, a a client can be put in a better situation on both sides of that equation: ADL doublers or 7702B long-term care, but you need to understand what each of them are and what each of them are not. So I totally agree. Um, read the contracts, stick by um a carrier wholesaler or a trusted contact. I know that sometimes uh there are wholesalers out there who are unaware of 77 O2B long-term care annuities, and we have to tell them look, if your product was structured this way, you'd get XYZ benefits and sales ideas to be able to add to your portfolio. So don't just trust word of mouth. Please read the contracts because it really, really does matter specifically for these types of products. Just wanted to uh mirror what you were saying.

SPEAKER_01 17:00

Yeah, Chris, I know you're typing the chat. If you're not in a good place with your uh microphone, uh you can ignore this. But yeah, if you want to share your experience, I think uh a couple of people also were interested in your uh preparation for the Equitrust interview that

EquiTrust Bridge Deep Dive and Interview Prep Tips

SPEAKER_01 17:14

I mentioned.

SPEAKER_00 17:15

Let me turn the camera back in. So you know the Equitrust bridge, you know, great product, you know, 1035 exchange, looking for lazy money. Kind of the question of you know, if caros needed, where are you gonna pull the money from? The old Don Quante, you know, thing you have shared is what bucket do you use? Well, they might say, well, maybe out of my CD or savings, or I've got this old nudie. So those old nudies are perfect for a 1035 to Echo Trust. I had a lady uh in her 70s, stage four cancer, and she got 300% leverage on her dollars. Um I sat down with her and her husband, explained how the process goes, that they're gonna do a video interview, they're gonna have to stand up, sit down, you know, walk a line, you know, repeat, you know, things. And you know, the guy, the the husband, he's got ADD a little bit. I told Pick, don't have anything around you, stay super laser focused. You know, I just knew him, so I told them to stay focused, you know, so they get the best leverage. I go, there's no do-overs, but there is, you know, you have to wait. But um so they're able to get you know the maximum benefit out of their, especially anywhere else, you know, she wouldn't have gotten that much leverage at their age. Um the ADL doublers that you talked about, be really careful of those because I hear agents talking about, oh yeah, you know, this annuity, you know, it's got ADL doubler, you know, two or six ADLs, then you know you'll get doubling the payment. Well, if you look at the illustration, most illustrations run out of money in the cash value, the account value, about the time care is needed. So somewhere in the early 80s, right? Well, there's no cash value left, so there's no doubler. You know, in Aquitrust, they do offer doubler to continue, but there has to be cash value when it starts for it to continue with a doubler. Now with married filing jointly, aquatrust only pays one and a half percent, you know, one and a half times instead of a double, you know, for married filing joint.

SPEAKER_01 19:25

You're talking about on their their non-LTC product, right? Right, they have two annuities.

SPEAKER_00 19:31

On their annuities or marketplace, you know, yeah, yeah, long what you know, long term, short term, you know, they've got a few different ones, but they've got some very competitive annuities out there for income annuities out the marketplace. Um, I just did one through Midland, which is a sister company to North American, and they usually run pretty side by side as far as contracts. But there's a huge difference, and you brought this up, Mark, is North American you have to be in a nursing home to get the doubler. So two or six and a nursing home. Midland, you just have to have two or six, so those funds could come in, you could use it for home care, things like that. They both pay the payouts are, I mean, within a couple hundred dollars of each other, very close. Um you know, in the 60s in Texas, it came down to Equitrust um and then North American and Midland. Well, Equitrust, like I said, on the married family jointly, is a you know, point and a half instead of two on the doubler. So Midland was the winner uh with that home care versus the nursing home care. So very important to like you're saying, yes, you know, those dollars can be taxable unless it's raw. Um, but yeah, it's yeah, a lot of things to think about, you know, when you utilize those other products like that, man.

SPEAKER_01 20:53

So one way to simplify it, and I've just learned this from our you know, BGA and IMO friends that focus on annuities is if you know what the annuity is primarily designed to do, that can be really helpful. Is it designed for income? Is it designed for growth? Is it designed for long-term care? Right? That's gonna be your primary reason why the client should buy it, and that's probably gonna have the more favorable contract language and illustrations. If you think the annuity can do all those things very well, you're probably mistaken, right? That's why we have a robust and competitive market. It's you have to know what the client's goal is, and that's gonna lead you to the right solution.

SPEAKER_00 21:31

Most people resolved the wrong annuity in the first place, you know. Because, like you're saying, Mark, there's really three buckets. You know, uh income, accumulation, or long term care. And so if it doesn't fit in those three, but you know, someone my age, I'm 66. So I shouldn't really be talking about accumulation. It should be more about income because I'm pregnant and either I can't work anymore, maybe down the road and I need the income, or I don't want to work down the road, dear. I want the income. So Yeah, and where do you want to put the dollars in? The sooner you get into income annuity. I mean, not your age, Jason, but so my age, young, or maybe a few years back. That's a great time for income. But the rest of the time is accumulation. Yeah, for someone like you, Jason, it's gonna be accumulation. So you shouldn't have all these. I ran in somebody who had an income annuity about your age, Jason. I was sitting on this is such a waste of money. You're paying a point, a point a quarter for the income rider, and you'll never use it. It's crazy.

SPEAKER_02 22:29

You you're probably uh you've probably run into one of maybe uh a hundred, two hundred people my age in the world that have an annuity, even to speak of, that's not you know, bequeathed from a family member or something of that nature and some sort of trust setup. Um, but you you brought up so many good points, and I love when you guys just share any sort of perspective because it brings up a couple of talking points um that I overlooked kind of in my initial assessment. Number one, yeah, you have to represent the product for what it is and for what the goal is. And I think if you're looking at, say, annuity products on a spreadsheet, it can be really misleading to know what you're actually getting out of the product if the spreadsheet is not worth its salt in actually talking about some of those uh living benefits, you know, some of those um chronic illness or ADL doubler or long-term care benefits, right? And it's important that the client knows the difference between them because it's not like all the contract language is going to be in a spreadsheet. So they may come within a couple of hundred dollars of each other in a single premium, but there's more than meets the eye. So that's something to look out for, but you have to represent the product for what it is, right? And clients will ask, you know, couldn't I just go out on the market and get an annuity that's going to perform much better from an accumulation standpoint, from an income standpoint, whatever it may be. And you kind of have to remind them and be that rudder that look, the primary objective of this is long-term care benefit. And we're looking at this specifically in an annuity solution for these reasons. You know, maybe we're it's a it's a tax play and we're leveraging the PPA. You know, maybe it's an underwriting challenge, and this is going to provide us good access to 7702B long-term care coverage, which is not so easy to find at certain age ranges. So just uh remember to be that rudder and remember to represent the products that we're talking about here today as a long-term care solution. And as a matter of fact, we're repositioning an annuity that's if you're doing a proper financial analysis, is not accomplishing much for you now. Like Chris said, he's um met with tons of people with mismatched annuities. I know many people have uh similar experiences as well, where people do an annuity review and they say, This does not make sense for your situation. If you're dealing with folks who have that long-term care need, that's kind of your perfect opportunity of found money, repositioning and getting the client to a place of more financial efficiency, risk management, protection, all that good stuff. And I I want to share a chart from Equitrust. Um, because Chris, you had mentioned your case study of our 70-year-old

EquiTrust Coverage Tiers and Agent Portal Resources

SPEAKER_02 25:41

who uh was dealing with uh cancer diagnosis and ended up with 300%. So this is uh essentially based on whatever um class you are looking at of coverage. Secure is essentially our our guaranteed issue level. But based on your age, there are different long-term care coverage ratios that you can end up with. Obviously, you can see that this is designed to provide at least a little incentive to start looking at folks who are um at the younger part of the age range, right? Your ceilings are just in general much higher than say somebody who is in their 70s. But yeah, for a 30-year-old woman's stage four cancer, you said Chris, uh 300% is almost clipping the ceiling of preferred. So uh that's a really interesting case study to hear. Um, but this chart is very, very helpful. Um, and I I gotta give a shout out to Equitrust and and nationwide as well. Both have really, really good agent portals to help you learn their products. Um, but bridge, I have to give an extra shout out to because there is no agent login required to access their uh agent portal and their product information page about bridge. So you get all sorts of materials here. What is bridge? Never stop wellness program uh is another interesting benefit to this. Underwriting is super, super important with Equitrust. Of course, you can choose to take the GI and forego the underwriting process. But if you do go through that underwriting, like Chris said, you're going to want to do a lot of prep uh for that interview. And this is not just something that I've heard from Chris. I've heard this from many specific to Equitrust. Just make sure they're right and ready. State approvals, there's all sorts of stuff available on Equitrust's agent portal page. So I highly recommend checking it out. It's agents.equatrust.com slash bridge. Um, and then nationwide has a page of its own, but it's going to require uh a financial professional login. And I just want to um, you know, I think many people will talk about annuity long-term care, they'll use

Annuity LTC vs. Life Hybrid: Terminology and Key Differences

SPEAKER_02 28:16

the word hybrid, and in a terminology-laden industry, I don't want you to get this confused with life long-term care hybrid plants, because um though annuity products offer some live dire quit protection of sorts, it is not in the same way that your life hybrid products will. But there is sort of a value proposition there. Your mileage definitely varies by carrier, but there are generally some um, you know, death benefit options. There are definitely um, you know, surrender values that you can come away with, but there are surrender charges for these annuity products generally in the first 10 years. Um, and then of course, the living benefit is always great, but I think these products weren't really um deep dive sort of comparisons. I don't think they're very easy to spreadsheet, as far as I'm concerned, unless somebody's had some really good success uh spreadsheeting them through some sort of software or in their own practice. Um, I also agree with Chris that if you're using Equitrust and looking at um or looking at a fixed index annuity product um at all, no shiny objects. I would totally agree with that. Um I would stick with what's standard, what works, what's recommended, and focus on the long-term care benefit first and foremost.

SPEAKER_01 29:53

And I think a big reason for that is like we talked about earlier, if you're not focused on accumulation or growth, the client is not planning for the right reason the product, you get them off of off track, you know, pretty quickly. Um and I, you know, I think that uh if you keep it simple, that's gonna help you also move it forward and make the sale. The more complex you add to it, the more delays, the more concerns. And a lot of times that's what the killer is. It's just there's too much. They bring it to their advisor, and all of a sudden it's like, what? I don't believe in index products, and and now it's really totally derailed what you were trying to accomplish for a long-term care perspective in the first place.

SPEAKER_02 30:33

Yep. Um, and I want to talk a little bit about nationwide's care matters

Nationwide Care Matters Annuity: Product Breakdown

SPEAKER_02 30:42

annuity, real quick, because uh I think this is bringing to light uh something that you'll start to see more and more, especially if you work with nationwide on the hybrid side, if you work with one America on the hybrid side on their asset care side. Uh, you will almost be forced, if you have any declines at all, to uh become familiar with annuity long-term care because nationwide now has this sort of uh similar practice as One America, where if somebody is declined for asset care or for care matters too, generally underwriting new business will follow up with an offer for their annuity product. So you were declined for asset care. Here's an offer for annuity care. Here's what we could offer. Um, same thing with nationwide decline for care matters, here is an offer for care matters annuity. Obviously, it's a it's a great strategy from the carrier standpoint, right? Because this allows us to um offer the client something with uh more favorable underwriting, still get them some long-term care coverage. And of course, as the carrier, even though we can't offer them the product they were looking for primarily, uh, we're making every effort not to lose the sale. Um, so I think you'll see that uh as you start to work with um more of those products. But let me just share a little bit of what I have here on Care Matters Annuity. Let me just pull it up for you quick. Okay. So what I'm looking at from a perspective of their sweet spots is cash indemnity benefit is always nice. That flexibility, right? Being able to pay for informal care, uh, fully guaranteed long-term care charges. Uh, the simplified underwriting is quite simplified as far as I'm concerned. And from what I've heard from the good folks at nationwide uh on the product side and the underwriting side is that they're targeting about 95% approval. Um, so you're going to have to have a client who's in pretty dire streets um not to qualify for care matters annuity. And if they don't, Equitrust is sitting there as another option that is guaranteed issue. So I really like how those two products can kind of compare and play off of each other. Uh again, we talked about the care matters two declines. Um for just riders, so say we're having uh an inflation rider added to care matters annuity. There is separately identifiable premium for the riders only, not for the actual um long-term care benefit itself, unfortunately. But we do have uh an interesting play there. Um legally married spouses can continue the care matters annuity contract of their spouse as an option, but without long-term care. So I thought that was interesting. Maybe not the whole reason for the sale, of course, but I thought that was an interesting little add-in. The issue ages are are interesting and they're going to depend really on um uh there are certain age ranges that can qualify for certain underwriting tiers, uh, as we understand it. So uh preferred and standard underwriting are for age ranges 40 to 74, and 75 to 80 is eligibility for select underwriting, and we'll get into that a little bit in a second. Um, still uh a number of states that have yet to be approved for this product. I feel that a few will likely come within the year. Um, some may never come, right? We we know that story well enough. Minimum premium of 36,000, max of 400,000, uh, 3% interest crediting rate, guaranteed for the life of the contract. Here's the surrender schedule. Again, single premium only, pretty standard story um for the annuity market. And here's where I say that they're kind of similar to Forecare's annuity long-term care product. And uh they are open with us in saying that they were kind of inspired by this structure. Um, but your underwriting is going to essentially be comprised of knockout questions and questions that determine whether or not you'll get a two times or three times multiplier for long-term care. Okay, so um if you are standard underwriting, you will have the three times multiplier, but four years of coverage. With preferred underwriting, you can access six years of coverage uh with a two times multiplier. With select underwriting, you have six years and a two times multiplier. Um, but you can see the six years is broken out a little differently, um, depending on if you're preferred or select underwriting. So it's two plus four years for preferred and three plus three for select underwriting. And something that I haven't seen yet from carriers, 100% international benefit. So again, uh nationwide is a carrier that has been committed to kind of offering some of these um below the surface benefits that are becoming more and more popular and more and more relevant in our day and age. Uh, international benefits definitely one of them, and and really cool to see that on this product. Um let's see. So, Mark, you're just replacing me with the AI summary here. You notice we can have Chad GPT speak to him. Um, inflation detection.

SPEAKER_01 37:05

I know I put that out there, by the way, is uh I just wanted to mention that AI has gotten quite good and much more accurate, less hallucinations when it comes to products. So don't be shy about just typing in questions into your favorite AI tool, whatever that might be.

SPEAKER_02 37:21

They're stealing from people like us. That's why that's why we keep feeding them the information. Um again, this is why the conversation with clients is so important about the purpose of the annuity. Annuitization is available, but if you elect it, long-term care benefits are forfeited. So just remember that. And the remaining contract value can be paid out via lump sum or annuitization uh on death. So spouses are allowed to continue the contract without long-term care, but you must be legally married, so no domestic partnership rules there. 90-day with that uh nationwide typical uh retroactive elimination period is very, very attractive as well. So on the 91st day, nationwide's gonna pay you back the first three months and your first month. So that is very, very cool. Um, and the underwriting for preferred, standard, or select. Preferred is gonna be your three times multiplier. And remember, you got different structures, but two times multipliers regardless with standard and select, but they are going to give

Underwriting Details: 6 Questions, Multipliers, and Approval Rates

SPEAKER_02 38:30

you six health questions. How's that for simplified issue underwriting? So if you answer yes to two of those questions and only two and no more, you have a preferred rating on your hands. Four yes answers is standard, five yes answers or more is a decline. So not too bad. We're gonna ask you six questions, and to qualify for this plan, all you have to do is be able to answer no to four of them. Um, so that's a really interesting process. And you can um quote this on WinFlux and in nationwide's um agent portal as well, nationwidefinancial.com. And uh I think this is a very interesting competitor. I think we're gonna start to see more hybrid carriers offering something like this. The annuity market is hot. Uh, lots of lots more people own annuities nowadays. And I just think this is important to understand from a conceptual standpoint. Remember, we are not in uh an employment market like we were 40, 50, 60 years ago, where people retire with a pension, which is essentially a guaranteed income stream, right? So people are actually creating their own pensions through private purchases of annuities. So there are annuities out there, it's become a very, very hot market. Even retirement accounts have uh annuitization options of sorts attached to them nowadays. Um, so I think it's important to not leave that out of your fact finding, especially when you're meeting with somebody who meets some of this other criteria. This is an opportunity to open up uh an easy on the mind, easy on the wallet sale for long-term care for a client.

SPEAKER_01 40:26

Yeah, I'll give you some more

Market Momentum and What's Coming Next in Annuity LTCi

SPEAKER_01 40:28

data too, Jason, just to reiterate what you just said. Uh, at the ILTCI conference in uh March, I heard two interesting facts. One is that there are at least one or two other carriers that will be launching annuity long-term care soon. So, like you mentioned, this is getting to be a hot market. And I also heard from a credible source that uh nationwide had a goal for the year of what annuity sales they wanted to hit, and they had already hit it in March. Not bad. They're way past on pace for what what they're looking to do. So again, all of that is good news. It means that we're gonna see more competition, more innovation and growth there, but it's a signal, right, that that's a market you need to pay attention to. Demand, right?

SPEAKER_02 41:11

Um at the end of the day, uh, you don't you don't reach sales goals for the year in March without some sort of demand. Um, it's a good signal that you offer a good product and have good distribution, right? So all healthy signs there. And of course, um, you know, it's always normal in the back of your mind to say targeting 95% acceptance. That can't be realistic, right? But just remember how the underwriting breaks down, uh very predictable amount of leverage that they're offering with these, so they can generally tend to um take more risk and uh really try to offer this to a wider uh group of folks. And I think when we think about the consumer first, that's what the long-term care market needs. More options for people to be able to engage with, right? I think the worst thing we run into um as agents, as specialists, as people who are professionals in this industry, is telling a client, I don't have anything for you. And I've been beating this drum since I was at Buddy INS, and even before that the market is continuing to move in this direction where we're not having to have that conversation as much as we have in the past. There is no true one size fits all product. But generally, if you've got a good financially qualified client who understands the importance of long-term care coverage and you're willing to turn over every stone, um you're gonna be hard-pressed to find a client that is 100% sealed out of something that is going to contribute to their funding of professional care, right? And that's a big thing.

SPEAKER_01 43:12

One is as you mentioned last year, they had a huge fire sale because they um really simplified the underwriting criteria down to five knockout questions, not necessarily with the extension writer, but just for those pure 1035 sales. And obviously that was a really smart strategy because you know we saw kind of a blockbuster sales there. Um, they also have indexed annuity care, so they have a different, you know, kind of a version there. And um, they go up to higher ages. I think they go up to 87. So there are going to be sweet spots with each carrier. Um, you know, obviously the the newer ones, the two newer ones that Jason covered are are really competitive and in great value. But don't forget, you know, One America as well, because they've been around, they're the OG.

SPEAKER_02 43:56

One of the OGs they are, they're like the first one to do it. That's why they deserve a shot at. Definitely trust your specialists.

Trusting Your Carrier Specialists and Referral Partnerships

SPEAKER_02 44:06

Uh I think all of the carriers that I mentioned, you cannot miss. They have excellent internal folks at One America, at Nationwide, at Equitrust. Um for those big three, um, definitely lean on someone. If you don't work with um, if you don't work with annuities just in general, I know it's a long-term care product. I know you'll feel very comfortable talking about how the long-term care benefits are delivered and some of the advantages. But for the kind of annuity mechanics, if you feel out of your depth, just lean on someone because the folks at these carriers are trained um up to their eyeballs and training materials with uh just annuity solutions in general. So never be afraid to leverage an expert. And this is a great opportunity, I think, for a referral partnership with somebody who is a traditional annuity specialist. You know, we've had uh our friend Tracy and Zach from the Annuity Giants Facebook group on to give us some annuity 101, some annuity 102. Um, and those were very useful sessions just for helping us to understand how to deal with an existing annuities we may run into and how to evaluate them. But if you have a relationship with an existing annuity specialist and you can have somebody there who identifies annuities that are not doing what they're supposed to for the client, uh, you can help them understand which ones may be a good candidate for a repositioning into something that's going to help the client with long-term care. And it's a very reciprocal business because you may have uh long-term care clients that you find are good candidates for annuities or good candidates for an annuity review. So if you've got somebody you trust, I always say, you know, long-term care specialists and financial planners, financial advisors go hand in hand. You know, long-term care specialists and annuity specialists, long-term care specialists and life insurance specialists go hand in hand for that reason as well. They help you find the money, they help you do analyses that you may be out of your debt on. And at the end of the day, it can be a really symbiotic relationship. So I wanted to close on that. Um, Ron did ask about um carriers on the horizon with a joint life long-term care annuity. Um, Mark, do you have any inside intel on that?

SPEAKER_01 46:39

Um, I think the most likely is going to be um One America, which I think already has the joint annuity and nationwide, which has the joint care matters, the life hybrid. Very likely I could see them doing that, but I don't know for sure.

SPEAKER_02 46:54

I heard mentions whether it was whispers or just kind of like it's it's in the it's it may be in the plan. I didn't hear anything 100% committal as far as like a release date or concrete plans, but I would expect it at some point here.

SPEAKER_01 47:09

Yeah, and the new carriers, again, I don't have any official notice, but picture you know, the carriers that we know in the hybrid space, like your Lincolns, your security ins, those are the companies that I think are most likely to come out with new annuity products.

SPEAKER_02 47:23

Yep. Um, why

Handling Client Resistance to Annuities

SPEAKER_02 47:25

do so many educated and higher net worth people shut down when an annuity is mentioned? I think it goes back to kind of what Chris had said is you really need to help the client understand that there are different types of annuities for different types of goals. So they may look at your long-term care annuity and they'll look at the accumulation value of the annuity and say, this is bogus. I could go out onto the open market and get something with three times the accumulation value. And that's where you have to say, yeah, you absolutely could, because the goal here is not accumulation. It's actually leverage for long-term care should you meet it. And, you know, if you've if you've got an annuity that can be repurposed with uh really no hit to your financial picture, you can get it working more efficiently for you for long-term care, not worry so much about the accumulation. I think people get stuck on those numbers. What's the accumulation? What's the the base policy sort of income, irrespective of long-term care? They don't think about the extra leverage or tax mitigation. So you got to be a rudder for these kind of products and keep people focused on why you're offering this product to them. Accumulation equals bond portfolio. Yeah, there you go. Um anybody else have anything they want to share? Yeah.

SPEAKER_00 48:49

Well I'll put you on the phone with it.

SPEAKER_02 48:54

But yeah, you're so I mean you can't win them all, and and sometimes people sometimes people don't want to have their mind changed. They just kind of like everybody has had a prospect in their career that is really just there to argue at the end of the day, and you can try to be non-confrontational, you can try to be a trusted consultative advisor and say, look, this is why I'm offering it to you. I mean, that this is all I can say. Um, and I know there are products out there that do that better. I concede that. But at the end of the day, they're they're just trying to hear their own voice, and that's where you just kind of let them go, right? Well, awesome. Well,

Closing Thoughts and Study Hall Wrap-Up

SPEAKER_02 49:42

I think that'll do it. We're pretty close to the top of the hour. Hope you guys have enjoyed these study hall sessions. Um, you know, this is just a way where we can kind of take one product type and put it under a microscope and really point out each product type's specialties, ideal clients, and what are the carriers that we know, love, and trust to take a look at. Um I believe we are just about wrapped on study halls for the year. Um, let me see. We've done traditional, we've done hybrid life long-term care, we've done short-term care, we've done annuities. I mean, those are some of the majors. Maybe we'll do kind of alternative long-term care planning for a study hall at some point here because there are some non-insurance, of course, long-term care funding strategies that we could take a look at. But um, hope you guys have enjoyed. We'll still do product roundups and things like that to keep you up to date. We're gonna have um other presenters coming in down the road to talk about specific products. Um, but yeah, hope you enjoyed and thank you for your contributions. They help make this what it is. So be well, and we'll talk to you this time next week. Bye everyone.