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Annuity With LTC Rider Debuts

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Genworth Financial Inc. (NYSE:GNW) is rolling out a linked-benefit policy that links single premium non-qualified deferred annuity with a long term care insurance rider.

Called the Total Living Coverage Annuity, the policy is being underwritten by Genworth Life Insurance Company, a unit of Genworth, Richmond, Va.

The contract allows policyholders to use their annuity value to purchase LTC insurance coverage up to three times the amount of their single premium, says Buck Stinson, president of Genworth’s U.S. Life Insurance Products.

That creates “pool of benefit dollars for LTC expenses,” he says. At time of LTC claim, the benefits pay out first from the annuity value and then from the remaining pool.

The LTC claim payments are tax-free to the policyholder, the company says, noting this is due, in part, to tax benefit provisions in the Pension Protection Act of 2006.

Consumers may be able to fund the policy with a tax-free 1035 exchange from an annuity or life policy, Genworth says, but the company notes that “consumers should carefully consider whether a replacement is in their best interest before making a decision to replace their existing product.”

Other policy features include:

- Guaranteed renewable LTC coverage

- Simplified underwriting process

- Optional inflation protection

- Waiver of monthly LTC charge provision

Genworth says consumers who would benefit from the policy include those who: are nearing or in retirement with assets to protect; recognize the potential LTC need and the negative impact it could have on their financial security; are currently self-insuring against the risks of a future LTC event; and have investable assets of $200,000 or more (excluding home or qualified assets).

All guarantees are based on the claims-paying ability of the issuing insurance company.


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