Tax-Deferred to Tax-Free!

Beginning January 1, 2010, The Pension Protection Act will allow for specific Annuity contracts to pay qualifying long-term care expenses, INCOME TAX FREE!

Using cash value withdrawals from specific annuity contracts to pay for qualifying long-term care expenses or to pay qualified long-term care insurance premiums, will no longer be taxable income. Instead they will be considered a reduction of cost basis.  “A reduction of cost basis” means that distributions from the policy are non-taxable and reduce the owner’s cost basis in the contract (but not below zero).

Clients who have annuities as part of their investment portfolio today may also take advantage of this significant federal tax incentive that is just around the corner.

However, only certain annuities are ‘built’ to reap these benefits.  Annuity Care® from state Life is one of those annuities. As of Jan. 1, 2010, withdrawals from Annuity Care for qualifying long-term care expenses will be income tax-free! 

Now is a great time to discuss the importance of Annuity Care with your clients. With the advent of annuities with LTC benefits, your clients may start to look at preparing for retirement a little differently.

To learn more about Annuity Care’s other features, like optional lifetime coverage and protecting both spouses on one policy, contact Provada today at 415-369-9990.