Long-Term Care Annuities

Posted by cameron

July 19, 2007 |

I was interested to read about new retirement products emerging in the world of annuities and long-term care. Daisy Maxey just wrote an article on the subject in Barron’s Weekly financial newspaper. A typical annuity pays a monthly sum in return for a substantial upfront payment. This may be perfectly fine until life deals you a blow and plans change. For example you may become disabled and need long-term care. You would still be receiving that monthly payment but it may not be sufficient to cover the cost of long-term care. There is also long-term care insurance that can be purchased to protect against the extra burden of paying for long-term care. If you never need the insurance then all the money you pay in is wasted. With the new so called Life-Care Products that changes. These products combine those two needs into a single financial package. If you need that long-term care then the monthly payment to you would increase by a set amount to help cover the extra cost. The intent here is to get around the inflexible nature of annuities, as we have known them, and to build a more flexible product in case you need both types of income. Barron’s has listed three companies that are now offering or will offer these new products. If you are interested the links are below:

Genworth Financial

Guaranty Income Life Insurance Company

State Life Insurance

Thanks to Barron’s for the links.