OneAmerica State Life Annuity Care Hybrid Annuity and Long Term Care Review – Long Term Care University
Long Term Care University – Question of the Month – 07/15/26
By Aaron Skloff, AIF, CFA, MBA
Q: We read the Long Term Care University article ‘Traditional Versus Hybrid Life and Long Term Care Insurance’ , ‘Hybrid Annuity and Long Term Care’ and ‘1035 Tax-Free Exchange‘. Can you please review the OneAmerica State Life Annuity Care Hybrid Annuity and Long Term Care (LTC) policy?
Overview. Forethought Life Insurance Company is part of Global Atlantic, Life Insurance Company, an A.M. Best A rated, a wholly owned subsidiary of KKR founded in 2004. The Global Atlantic Forethought ForeCare policy is a Hybrid Annuity and Long Term Care Insurance (also called asset based) policy. With Traditional LTC policies, premiums can be increased and you may not receive any benefits if you do not need LTC. With Hybrid LTC policies the benefits and premiums are guaranteed. The insurance company either: 1) pays you if you need LTC, 2) pays your heirs if you do not need LTC, 3) pays you and your heirs if you need a modest amount of LTC or 4) pays you a refund if you cancel the policy.
Click Here for Your Long Term Care Insurance Quotes
OneAmerica State Life Annity Care is Unique Because It Has a 7 Day Elimination Period. An elimination period is the number of days you pay for your LTC costs out of your own pocket (like a deductible on a homeowners insurance policy). Annuity Care begins paying for your care after 7 days of care.
OneAmerica State Life Annuity Care is Unique Because It Provides Lifetime Benefits. One of the largest long term care insurance companies reported that 50% of all claims dollars it has paid are due to dementia, including Alzheimer’s disease. According to the Alzheimer’s Association, 1 in 9 people ages 65 and older and about 1 in 3 people ages 85 and older have Alzheimer’s disease. The duration of Alzheimer’s disease is generally four to eight years after a diagnosis, but can last as long as 20 years.
OneAmerica State Life Annuity Care Policy Options. The policy options include: Benefit periods of 3 years or Lifetime, with a Continuation of Benefits (COB), for an individual or shared policy; Nonforfeiture and Inflation protection of none, 2%, 3%, 4% or 5%.
How OneAmerica State Life Annuity Care Compares with Other Hybrid Annuity and LTC Policies. Let’s look at a husband and wife, Bill and Sue, who are each 70 years old and reside in Florida. They each pay a $100,000 one-time premium (or $200,000 combined) and are expected to need LTC in 10 years at the age of 80. They are comparing Hybrid Annuity and LTC policies that offer the largest LTC benefits, with at least five years of LTC benefits.
OneAmerica State Life Annuity Care Outperforms Competitors with Lifetime Benefits and an Unlimited Dollar Amount of Total LTC Benefits. Bill and Sue will each have a $3,086 Base and $2,259 COB monthly for an induvial policy at age 80 or $5,300 Base and $3,879 COB monthly for a shared policy at age 80 – both with Lifetime total LTC benefits. Global Atlantic Forethought ForeCare is notable for its 0 day elimination period for home care. OneAmerica State Life Annuity Care II is notable for its highest non-lifetime individual and shared monthly LTC benefit. OneAmerica State Life Indexed Annuity Care is notable for its highest lifetime individual and shared monthly LTC benefit, and that policy values are linked to major market indices.
Click to Enlarge
Conclusions. OneAmerica State Life Annuity Care provides Lifetime benefits and an unlimited dollar amount of total LTC benefits. Since premiums vary greatly based on age, health and marital status, request individualized quotes.
Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA) charter holder, Master of Business Administration (MBA), is the Chief Executive Officer of Skloff Financial Group, a Registered Investment Advisory firm. The firm specializes in financial planning and investment management services for high net worth individuals and benefits for small to middle sized companies. He can be contacted at www.skloff.com or 908-464-3060.
Click Here for Your Long Term Care Insurance Quotes
Frequently Asked Questions
Q: What is OneAmerica State Life Annuity Care, and how does it differ from a traditional long-term care insurance policy?
OneAmerica State Life Annuity Care is a hybrid asset-based long-term care solution that combines a fixed deferred annuity with long-term care benefits. Unlike traditional long-term care insurance, which requires ongoing premiums that may be lost if you never need care, Annuity Care is typically funded with a single premium using existing assets such as savings, CDs, or non-qualified annuities. If long-term care is needed, the annuity value can be leveraged to provide substantially larger tax-free benefits for qualified long-term care expenses. If care is never needed, the remaining annuity value generally remains available to the owner or beneficiaries, helping eliminate the “use-it-or-lose-it” concern associated with many traditional LTC policies.
Q: Who is an ideal candidate for a hybrid annuity with long-term care benefits?
Hybrid annuity and long-term care products are generally best suited for individuals who have accumulated liquid assets they have earmarked for retirement or healthcare expenses and would prefer repositioning those assets instead of paying annual long-term care insurance premiums. These policies are particularly attractive to retirees and pre-retirees who want predictable funding, principal protection, guaranteed interest, and the opportunity to leverage their assets if long-term care becomes necessary. They can also appeal to individuals who dislike paying premiums for coverage they may never use while still wanting protection against potentially devastating long-term care costs.
Q: What long-term care services are typically covered by OneAmerica Annuity Care?
Like many qualified long-term care insurance products, OneAmerica Annuity Care can help pay for a broad range of qualified long-term care services once benefit eligibility requirements are met, such as needing assistance with at least two Activities of Daily Living (ADLs) or experiencing severe cognitive impairment. Covered services may include home health care, assisted living facilities, adult day care, hospice care, respite care, nursing home care, and certain care coordination services. Many policyholders appreciate the flexibility of receiving care at home, where most people prefer to remain as they age.
Q: Are long-term care benefits from a hybrid annuity taxable?
In many cases, qualified long-term care benefits paid from products like OneAmerica Annuity Care are received income tax-free under federal tax law when used for qualified long-term care expenses, subject to applicable IRS rules and policy limits. This favorable tax treatment allows policyholders to maximize the value of their benefits while reducing the financial impact of long-term care. However, tax treatment depends on individual circumstances, so policyholders should consult their tax advisor before making decisions regarding funding or benefit distributions.
Q: Can Annuity Care provide protection if long-term care lasts longer than expected?
Yes. OneAmerica offers optional coverage extensions that can significantly lengthen the period during which long-term care benefits are available, including options that may provide benefits well beyond the initial annuity value and, in some product designs, lifetime protection. Choosing an appropriate benefit period depends on a person’s age, health, family history, available assets, and risk tolerance. Working with an experienced long-term care specialist can help determine whether the additional protection justifies the added cost.
Q: How does OneAmerica Annuity Care compare with self-insuring long-term care expenses?
Self-insuring means relying entirely on personal savings and investments to pay for future long-term care costs, which can easily total hundreds of thousands of dollars over several years. OneAmerica Annuity Care allows individuals to leverage a portion of their existing assets into a substantially larger pool of long-term care benefits while preserving flexibility if care is never needed. For many retirees, this approach provides greater financial certainty, helps protect retirement assets from being depleted by extended care expenses, and offers peace of mind that both healthcare needs and legacy goals can be addressed more efficiently than relying solely on personal savings.
