Global Atlantic ForeCare
By: Cliff Marshall
Global Atlantic ForeCare is a fixed annuity with Long Term Care Benefits. When planning for retirement we often worry about protecting our assets from market downturns, taxes, and inflation. On top of all this you also must consider the likelihood of a situation that will require the need for long term care of either you or your spouse.
Statistics are now stating that over 70% of people age 65+ will need long term care in the future. It is crucial to find a solution to cover this risk. Without a solution, You run the risk of depleting your savings and the estate you have spent a lifetime building, in a matter of a few years.
If you are on track to successfully saving for retirement. Diversifying a portion of your portfolio into a Long Term Care Annuity can be a strategic move to protect your assets from market downturns, while simultaneously leveraging your assets 2x-3x times to be used in case of a long term care event.
If you would like to see a personalized proposal feel free to Contact Me.
Global Atlantic ForeCare Long Term Care Annuity
ForeCares Offers a few unique benefits over conventional Annuities.
1) The ForeCare Multiplier 2x/3x: Provides two or three times the amount of the contract value in the event you need to apply for long term care expenses.
2) Principal Protection-Your contract value at months end is never reduced below the contract value at the prior month-end(less any applicable withdrawals) due to the cost for long term care benefits rider
3) Tax Advantages– Qualified long-term care withdrawals are typically federal income tax-free and your contract growth is tax-deferred.
Unlike a traditional long-term care product, if the ForeCare contract is not used for long-term care expenses, it can be passed to you beneficiaries as a death benefit. However, there is a monthly cost associated with the long-term care benefits rider, which is based on the insured’s age.
Leverage your deposit 2x-3x for your Long Term Care Benefits
Right Now about 73% of non-qualified fixed annuity owners plan to use their annuities to fund a long term care emergency. So let’s assume at the time that funds are needed for a LTC event you have $150,000 available in an non-qualified annuity, then the most available for withdrawal would be $150,000.
Now let’s assume instead you had originally purchased or transferred those funds into Global Atlantic ForeCare Annuity. On day one that $150,000 would have immediately been leveraged to $300,000 or $450,000 (2-3x depending on underwriting) the initial deposit. Which can then be used on qualifying long term care expenses.
So if a medical practitioner qualifies you as “unable to independently perform 2 of the 6 common Activities of Daily Living” which include:
- Personal Hygiene
Then ForeCare will provide the $300,000 to $450,000 for tax free withdrawals for qualified long term care expenses. That is the base amount you start with on day one, in addition it will however continue to increase over time with the internal growth of the annuity.
Global Atlantic ForeCare Example
The current interest rate is 1.75%, with a floor guaranteed rate of 1%. These Examples below are 1.75%.
5% Inflation Protection
Global Alantic ForeCare
Global Atlantic ForeCare plan does allow you to add a 5% inflation protection option. By doing this if you were to file a claim in year 15 you would have $6,411 per month in benefits versus $4,630 per month. In year 20 the monthly benefit would be $8,183 per month instead of $4,795 per month if you didn’t have the inflation protection. This does not cost additional money out of pocket up front but it would have an effect on the contract value/death benefit if you were to surrender the policy in the later years or pass away without using the benefit. This option within is for someone not as concerned about the value later but really wanting to maximize the long term care feature of the plan.
ForeCare Example 2
Joint Spouse-Age 62
ForeCare does allow you to add a joint insured on the plan. This will give both of you access to the long term care monthly benefits. Because there are two people on the plan it will reduce the monthly benefit available as compared to the single plan. In year 15 the monthly long term care amount is $3,560 per person and in year 20 it is $3,639 per person.
If long term care benefits are never needed and you pass away then your beneficiaries will receive the contract value as a death benefit.
If you would like to see a personalized proposal feel free to Contact Me.
Long Term Care Annuities With The Pension Protection Act
Using the example above, before the Pension Protection Act, under that scenario let’s assume that your cost basis was $65,000 and you had a $35,000 gain, you would have to pay tax on the $35,000 so the approximate amount available for LTC use would be $91,600.
Now you can transfer the full amount via a 1035 exchange to a compliant LTC annuity like the Global Atlantic ForeCare Fixed Annuity and immediately leverage that to as much as $300,000 from the first day.
On January 1, 2010 The Pension Protect Act (PPA) long-term care benefits took effect.
Global Atlantic ForeCare Annuity Options
Global Atlantic ForeCare Annuity, offers some unique options
1) Joint life annuity with your spouse. This provides the both of you with access to the long term care benefits pool.
ForeCare has the ability for this plan to be a joint life annuity with your spouse. The ForeCare plan will also allow you to add a 5% inflation protection option. These options do not require additional deposits but it does have an effect on the accumulation of values over time
Global Atlantic ForeCare – Underwriting
95% of applicants are approved with approximately 88% of those approved for the 3X plan and 12% receiving the 2X plan.
The Average ForeCare application process takes about 30 minutes. There’s no medical exam. Simply meet the height and weight requirements. Then, there will be a series of questions on your medical history to find out if you qualify and whether you could be approved at.
-the standard level, which is provides double the amount of the contract value for qualified long-term care expenses
-the premier level, which provides triple the amount of the contract value for qualified long-term care expenses.
Some applications may be asked to participate in a simple memory and logic exercise via a 15 minute phone call.
The process to get approved is really pretty easy and quick. Life all LTC annuity plans at ForeCare are no different. Once an application is submitted you will be contacted to do a telephone interview to go over your health history that will last approximately 30 minutes. We will provide you with an outline of what to expect so you will have everything ready to make the call the most efficient.
Is The Global Atlantic ForeCare Annuity Right For You: My Thoughts
Over the past 33 years of my career in this business, it is great to see different carriers creating more tailored and competitive products. Like all Hybrid Long Term Care Plans, ForeCare can is a great opportunity for the right client.
Each of our clients’ situations are different, and finding a plan that best suits your needs, is only possible after analyzing your financial situations, goals, and health.
If you would like me to streamline this process feel free to Contact Me Here.
We also work with all of the major carriers that offer traditional, hybrid, and annuity long term care plans.
If you would like to learn more about your other long term care options, here are some of my other product reviews Securian SecureCare, Lincoln MoneyGuard III, NationWide CareMatters II, Brighthouse SmartCare, MassMutual CareChoice One, One America Asset Care, Mutual of Omaha, American General Quality of Life.