Medicaid Annuity
Discover the Medicaid Annuity as an asset protection tool.
A Medicaid annuity is the term given to the process of using an immediate annuity to help protect assets against expected costs of nursing homes and healthcare charges.
Since Medicaid won't pay for nursing home care if you have liquid assets of more than $2,000, many individuals are using a technique known as Medicaid annuity to protect their assets. An individual effectively transfers all of their wealth to a third party insurance company to purchase an immediate annuity, which in return guarantees the Medicaid annuity owner a fixed monthly income for life.
While a handful of states disapprove and prevent this technique through look back clauses that identify spend down strategies, most states have a similar policy towards the Medicaid annuity. The basic requirements to qualify include that the annuity contract must be irrevocable, nontransferable, actuarially sound, and include equal payments over the lifetime of the annuitant without a benefactor or balloon payment upon death.
For many individuals that have accumulated up to $200,000 in retirement savings, the cost of nursing home care can be devastating over a very short period of time. In the absence of long term care insurance, many individuals in the past have been advised to impoverish themselves to qualify for Medicaid assistance. This can leave the remaining spouse with financial difficulties in the future.
Depending on your income, state regulations, net worth and retirement objectives, the Medicaid annuity could be an ideal tool for you. For more information on the process, your state directives and how the annuity works, contact us today for a friendly initial telephone consultation.
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