If you have not been talking about long-term care insurance with clients because you find the products too complicated or difficult to sell, then it is high time to bring you up to speed. For the LTC market is, by all accounts, enjoying a renaissance.
A chief benefit of the PPA, say experts, is the ability to escape taxation on account gains. If, after exchanging an appreciated single premium immediate annuity for a combo product, the client submits a claim, the LTC benefit (including the gain accrued in the old annuity) is distributed tax-free.
"I'm seeing a lot of clients transferring money from highly appreciated annuities into linked benefits product to secure a tax-free distribution," says Irving. "And the tax savings are often massive."
Benefits aside, sources say that if producers are to be successful in this market, they need to become properly versed in product mechanics, suitability issues and state laws governing linked benefit products.
Many states, observers note, require agents to first meet certain continuation education requirements before they can begin offering the solutions. Conversely, the products are not uniformly sold nationwide. Jurek says that California, Connecticut, New Jersey, Massachusetts, Illinois, Oregon, Utah and Vermont are among states that have not approved certain products for distribution.