Annuity Care II - AnnuityAdvisors

State Life Care SolutionsAnnuity Care II Products and financial services provided byThe State Life Insurance Company   a OneAmerica companyI-21688Not a deposit. Not FDIC insured. Not guaranteed by any bank. Not insured by any Federal government agency.

A fixed interest,deferred annuity that offers moreBenjamin Franklin famously said, “A penny saved is apenny earned.”Accumulated Value (LTCAV), the amount you wouldreceive should you have qualified LTC expenses.But Ben can’t give us wisdom today when it comes to themoney we have saved. Obviously, one focus is simplyhaving enough money to live on. At the same time,we need to have enough set aside should somethinghappen to our health toward the end of our life.Annuity Care II also allows you to extend the valueof this protection beyond your annuity’s LTCAV byautomatically including a Continuation of Benefits(COB) Balance. This provision will continue benefits ofqualified LTC expenses under the contract. The COBbecomes effective after the LTCAV has been reducedto zero (0) due to LTC withdrawals. This additionalprotection is purchased through a charge deductedmonthly from your values.For those who successfully saved and are meetingtheir income needs, now may be the right time to lookat places to put those “just in case” dollars.There are guaranteed interest rate products thatcombine the solid elements of fixed interest deferredannuities with the protective elements for end of lifecare. This end of life care is also known as long-termcare (LTC) benefits, but understand that the phrase“long-term care” can describe care in your home, in anassisted living facility, or other places besides a longterm care facility. It means you have options for thetype of care you may receive.These annuities offer the opportunity to use asingle premium, meaning a one-time payment canallow you to pay for protection and grow an assetsimultaneously. One of these annuities is AnnuityCare II from The State Life Insurance Company.How it worksAnnuity Care II is a single premium fixed interestdeferred annuity that combines long-term assetgrowth and LTC benefits. This protection is built-in tothe annuity, providing a combination of the annuityvalue and additional long-term care benefits shouldyou need them.The way it works, your single premium grows as theAccumulated Value (AV) with a guaranteed minimuminterest rate. It is this value that passes to your heirs atdeath (if you never need it for end of life care).At the same time, your premium grows at asecond, higher interest rate for the Long-Term CareAnnuity Care II, a single-premiumdeferred annuity with LTC benefits,is medically underwritten andrequires that you qualify for coverage.To learn how this policy can workfor your situation, ask your insurancerepresentative for a personalizedillustration and an Outline of Coverage.

Mary Johnson’s available LTC fundsbased on 100,000 premiumA hypothetical example of how Annuity Care II can workMary Johnson is a 65-year-old who has 100,000accumulated in savings for which she has no incomeneeds. She elects to apply for Annuity Care II and paysthis amount into the contract. Her premium creates apool of total LTC benefits equaling 250,487. Based ona minimum of 60 months of total protection availableto her, she could access this amount for a monthlybenefit of 4,175. So, using this example, Mary has 100,194 in her LTCAV and 150,292 in her COBBalance at the end of the first policy year.As the Long-Term Care Accumulated Value increases,so does the Continuation of Benefits Balance. So byyear 10, in our example, the LTCAV equals 101,922and the COB Balance is 152,883, giving Mary a totalamount of 254,805 available for qualifying LTCexpenses. She could access this amount for a monthlybenefit of 4,246. 300,000 200,000 100,000 250,487 254,805 150,292 152,883 100,194 101,9221 yr.LTCCOB10 yr.LTCAVAll values in this hypothetical example assume anon-guaranteed interest rate of 1.15%. These valuesassume that no partial surrenders or LTC withdrawalsare made.

Annuity CareTax advantagesAnnuity Care II provides an effective way to protectyour assets from the potential expenses associatedwith end of life care. And, it also does so in verytax-efficient ways! Long-term care benefit payments from the LTCAVare income tax-free as a reduction of basis Long-term care benefit payments fromthe COB Balance are income tax-free The monthly charge to pay for the COB Balance isincome tax-free as a reduction of basis in the LTCAVThese tax guidelines apply for federal income tax yearsbeginning after December 31, 2009.Who should consider Annuity Care II?Annuity Care II is medically underwritten, meaningyou should be in fair or better health to apply.Available from ages 40 to 80, it can be purchased withone insured (annuitant) or two — so it is available forsingle people or for spouses (covering both on onepolicy). The minimum single premium is 10,000 (mayvary by state), but you should evaluate what premiumis appropriate for your needs.Your choicesThe money you have accumulated in the LTCAV wouldlast a minimum of 24 months for a single personand 30 months for two people. After that, you haveaccess to the COB Balance. Based on your age and thedecision you make at the time of application, the COBBalance could last an additional: 3 years (available ages 40 to 80) 6 years (available ages 40 to 75) 9 years (available ages 40 to 70)In our hypothetical example, Mary Johnson wouldhave two years of benefits from her LTCAV, thenanother three years from the COB Balance, for a totalof five years’ coverage. Obviously, the longer theCOB period selected, the higher the monthly chargeyou pay. There is a 90-day elimination period beforebenefits begin.Another choice you have is to have the qualifyingbenefits paid to you on a reimbursement basis (onlycollecting what you submit in bills each month) or onan indemnity basis (where you collect the full monthlybenefit available regardless of the amount of billsyou submit). The indemnity approach means morepotential liquidity, but also a higher monthly charge.Reimbursement may allow benefits to be paid over alarger period of time when compared to indemnity(if the monthly benefit amount is not used in full).Finally, at the time of application you may select anoptional inflation protection benefit. This wouldguarantee your COB Balance growth at 5% compoundinterest each year, and is available with a separatesingle premium.Note: A fixed annuity is a long-term, tax-deferredinsurance contract designed for retirement. It allowsyou to create a fixed stream of income through aprocess called annuitization and also provides a fixedrate of return based on the terms of the contract. Fixedannuities have limitations. If you decide to take yourmoney out early, you may face fees called surrendercharges. Plus, if you are not yet 59½, you may also haveto pay an additional ten percent tax penalty on top ofordinary income taxes. You should also know that afixed annuity contains guarantees and protectionsthat are subject to the issuing insurance company’sability to pay for them.All individuals used in all scenarios are fictitious andall numeric examples are hypothetical and were usedfor example purposes only.Annuity Care II is available from ages40 to 80, and can be purchased withone or two insureds (annuitants).

If you need your moneyFor qualified LTC, there are no surrender chargesassessed to your LTC withdrawal at any time.Surrender charges are waived on partial surrenders up to10 percent of your AV (as of the beginning of the contractyear) after the first contract year. Any partial surrender thatexceeds the 10 percent free partial surrender amount willbe subject to a surrender charge in the first nine contractyears. Partial surrenders will reduce the AV as well asreducing the LTCAV and COB Balance on a proportionalbasis, meaning these reductions may be significantlylarger than the amount of the partial surrender.Upon full surrender of the contract, the AV will be reducedby the following surrender charge percentage based on thecontract year in which the full surrender occurs:Contract yearCharge12345678910 and thereafter9%8%7%6%5%4%3%2%1%0%If you never need long-term care benefits from yourcontract, then your Accumulated Value would pass toyour named beneficiaries, free of surrender charges.So, the money you have set aside works for you if youuse it for qualified LTC expenses, or not.Why Annuity Care II?You may have seen other options for dealing withlong-term care expenses, where you pay a premium,month after month, year after year. All the whilehoping you never have to use what you bought. And,knowing there is minimal (or no) value if you do notuse it.Annuity Care II could be the answer for your needs.It can allow you to reallocate existing assets — insavings, investments, or other annuities — on a singlepremium basis. Your money grows with a guaranteedminimum interest rate. It remains your money, and isavailable to pay for any qualifying LTC expenses youmay have.Ben Franklin also said, “An investment in knowledgepays the best interest.”Discuss Annuity Care II with your insurancerepresentative. Ask for a personalized illustration andan Outline of Coverage. Learn more so you can makean informed decision.

It’s time to plan for tomorrow. today.Note: Underwritten and issued by The State LifeInsurance Company, Annuity Care II is a singlepremium fixed interest deferred annuity thatcombines long-term asset growth and long-term carebenefits. Policy form SA35 may not be available in allstates or may vary by state. The information provideddoes not constitute legal, accounting, tax or otherprofessional advice. If legal or tax advice is required,the services of a competent professional in these areasshould be sought.About State LifeOneAmerica’s nationwide network of companies offersa variety of products to serve the financial needs oftheir policyholders and other clients. These productsinclude retirement plan products and services;individual life insurance, annuities, long-term caresolutions and employee benefit plan products. Thegoal of OneAmerica is to blend the strengths of eachcompany to achieve greater collective results.The State Life Insurance Company, a OneAmerica company, is focused on providing asset-based long-termcare solutions. State Life is a recognized leader inproviding these solutions, which utilize life insurance,fixed-interest deferred and immediate annuities.The company’s extensive Care Solutions portfolio ofproducts helps consumers prepare for future long-termcare needs by helping to protect their assets.About OneAmericaOneAmerica Financial Partners, Inc., is headquarteredin Indianapolis, IN. The companies of OneAmerica cantrace their solid foundations back more than 130 yearsin the insurance and financial services marketplace.The products of the OneAmerica companies aredistributed through a network of employees, agents,brokers and other distribution sources that arecommitted to increasing value to our policyholders byhelping them prepare to meet their financial goals.We deliver on our promises when customers need us most.The State Life Insurance Companya OneAmerica companyP.O. Box 406Indianapolis, IN 462061-800-275-5101www.oneamerica.comI-21688 2012 OneAmerica Financial Partners, Inc. All rights reserved. OneAmerica and theOneAmerica banner are all registered trademarks of OneAmerica Financial Partners, Inc.Not a deposit. Not FDIC insured. Not guaranteed by anybank. Not insured by any Federal government agency.I-21688 11/28/12

simultaneously. One of these annuities is Annuity Care II from The State Life Insurance Company. How it works Annuity Care II is a single premium fixed interest deferred annuity that combines long-term asset growth and LTC benefits. This protection is built-in to the annuity, providing a combination of the annuity