The Pension Protection Act (PPA) allowed for the creation of hybrid annuity-LTC plans - which allows money to be taken out of an annuity tax-free for qualified LTC expenses that would be eligible for reimbursement under the LTC rider.
The PPA also allows for 1035 exchanges of existing non-qualified deferred annuities and life for LTC policies and combination products, and also allows for partial exchanges.
The initial law had some abiguity regarding what the tax basis of the exchange contract would be, and now with urging from organizations like the American Council of Life Insurers (ACLI) the IRS has issued some guidance. Here is an ariticle discussing the issue...
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