In most cases, people buy annuities for one simple reason: certainty. In an uncertain retirement landscape, annuities offer guarantees that portfolios alone can’t, thanks to predictable income, principal protection, and protection against living a long life.
But today’s clients want more than income. They want efficiency, flexibility, and risk coverage for events that derail retirement plans, especially long-term care.
That’s where LTC annuities come in.
Read More: How to Initiate Meaningful Conversations Around LTC Planning
The Core Motivators Behind Annuity Purchases
Most annuity buyers are driven by a combination of:
- Income certainty they can’t outlive
- Risk reduction from market volatility
- Simplicity compared to managing drawdowns
- Peace of mind for spouses and heirs
For many retirees, the fear isn’t dying early—it’s living long and needing care.
Why Pair Annuities with Long-Term Care?
While traditional long-term care insurance often stalls on “use it or lose it,” LTC annuities flip that objection on its head. Clients like that:
- Their money is always working for income, care, or legacy.
- LTC benefits are typically leveraged 2–3 times the initial premium.
- Benefits are often income-tax free when used for qualified LTC expenses.
- There’s no “wasted premium” if care is never needed.
From an advisory standpoint, LTC annuities reposition existing assets such as CDs, bonds, or low-yield savings into something with multiple purposes.
Ideal Ages to Consider LTC Annuities
The sweet spot is typically:
- Late 50s to early 70s
- Clients transitioning into retirement or recently retired
- Individuals with assets they want protected, not aggressively grown
Younger buyers get better leverage and underwriting outcomes, while older buyers see immediate value in risk transfer.
Tax Advantages That Matter
LTC annuities offer several tax efficiencies, including:
- Tax-deferred growth on annuity values
- Tax-free LTC benefits (IRC §7702B)
- In some designs, partial or full exclusion ratios for income
- Strategic repositioning of taxable assets into tax-advantaged benefits
For many clients, it’s more than just chasing returns. It’s about keeping more of what they already have.
Read More: Understanding Tax Deductions for Long-Term Care Insurance
The Bottom Line for Agents
Annuities aren’t just income tools anymore. When combined with long-term care benefits, they become risk-management solutions that align with how clients experience retirement. If you’re already talking about income, protection, or legacy, you’re one question away from a meaningful LTC annuity conversation.
To learn more about LTC annuities and how they can fit into your business, register for our upcoming webinar on February 26.