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Clients with sufficient assets might be interested in leaving money to their heirs in tax-efficient ways but they also might be concerned about potential long-term care costs. A single premium immediate annuity (SPIA) can help provide opportunity to create predictable cash flow to fund a life insurance policy.
Using a SPIA to pay for life insurance can be a viable solution for clients who want:
- The certainty of premium payment provided by a SPIA
- An income tax-free death benefit from life insurance for those they care about
- A potentially larger sum of money to pay for long-term care, if needed
Using distributions from a SPIA – such as Nationwide's INCOME Promise Select® to purchase life insurance with the Nationwide® Long-Term Care Rider II,1 may provide additional opportunities that can address both needs – having enough money to cover long-term care costs and leaving a legacy. This option offers the added benefit of Nationwide making direct payments from SPIA contract to the life insurance policy reducing the risk of policy lapse.
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