Pension Protection Act |
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New Opportunities for Tax Free Funding of Long Term Care Insurance Premiums
The Pension Protection Act (PPA) of 2006 was created primarily to reform how defined pension plans are funded and administered. The premise of the act was to help protect participants of pension and retirement plans, while at the same time encouraging savings.
SPDA
Partial 1035 exchanges from a new or existing non-qualified annuity (Single Premium Deferred Annuity (SPDA) used to pay for a tax qualified long term care insurance premiums are:
• Tax free to the annuity owner, and
• Gain and basis within the annuity will be reduced pro-rata.
SPIA
Payments from a non-qualified Single Premium Immediate Annuity (SPIA) directly funding qualified long term care insurance premiums are:
• Considered a partial assignment of the SPIA contract in a 1035 exchange, and
• Based on our interpretation of current tax law, reported by us as taxable amount $0.00 (zero), unless the IRS issues instructions requiring different reporting.
View interactive presentation: Long Term Care Insurance Opportunities Under The Pension Protection Act
Sales Support Materials
Long term care insurance underwritten by Genworth Life Insurance Company and in New York, by Genworth Life Insurance Company of New York. Administrative Offices: Richmond, Virginia.
Annuities issued by Genworth Life and Annuity Insurance Company. Genworth Life Insurance Company and in New York, Genworth Life Insurance Company of New York. Genworth Life and Annuity Insurance Company and Genworth Life Insurance Company are licensed in all states except New York.
All guarantees are based on the claims-paying ability of the issuing insurance company.
Important Information: The Genworth Financial companies developed these materials to help you understand the ideas discussed. Any examples are hypothetical. They may not reflect your client's particular circumstances. Your clients should carefully read their contract, policy and prospectus(es), when applicable. What we say about legal or tax matters is our understanding of current law. We are not offering legal or tax advice. Tax laws and IRS administrative positions may change. We did not devlop these materials for use in avoiding any IRS penalty and neither you nor your clients may use it for that purpose. Your clients should ask their independent tax and legal advisors for advice based on their particular circumstances. We reserve the right to change the information reporting described herein to comply with forms and instructions issued by the Internal Revenue Service.
FOR AGENT / PRODUCER USE ONLY. NOT TO BE REPRODUCED OR SHOWN TO THE PUBLIC.
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