Pension reform law jump-starts hybrid LTC products; Coverage is combined with annuities, life insurance.(News)

Investment News, October, 2006

Byline: Gary S. Mogel NEW YORK - Many insurers are jumping on the long-term-care hybrid-policy bandwagon thanks to the recently passed Pension Protection Act's tax advantages, according to industry experts. Money taken from an annuity's or life insurance policy's cash value account to pay for an LTC rider isn't included in taxable income under the new law.

"Prior to the passage of the new pension law, premiums for LTC were taxable to the policy owner,'' said John Lancaster, president of Guaranty Income Life Insurance Co. in Baton Rouge, La. The company developed a combination annuity and LTC product seven years ago following passage of the Health Insurance Portability and Accountability Act, which allowed tax-free LTC benefits but not premiums....

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