What will we be discussing in this annuity review?

In this review of The State Life Annuity Care ll, we will be going over the following information:

  • Annuity type
    Independent Review of the One America Freedom Builder 9 Fixed Indexed Annuity
  • How the annuity works
  • Features and benefits
  • Potential drawbacks
  • Charges and fees
  • Where the annuity may fit (and where it may not fit)

Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.

If you are concerned about having enough income in retirement, but you also want to earmark at least some money for a potential long-term care need, then The State Life Insurance Company’s Annuity Care ll plan could be a possibility to help you with both of these objectives.

Given that people are living longer these days, a long list of long-term care related needs are becoming more common. For instance, in some cases, people require round-the-clock skilled nursing care, and in others, intermittent care with dressing or bathing might be needed.

But in any case, this type of care can be expensive – and without some type of plan in place to help with paying for all, or even some, of these costs, a care need could essentially wipe away many years’ worth of savings from your portfolio.

One option for covering these costs is stand-alone long-term care insurance. Unfortunately, though, these plans can come with high premium requirements. Worse yet, if you never end up using the “use it or lose it” coverage, the many thousands of dollars that you paid into it will have gone to waste.

There is a potential solution, though, which entails using annuities to pay for at least some long-term care costs. And in this case, if care is never required, the money from the annuity can be used for other purposes.

But before you go out and purchase this type of plan, it is really important that you know how it works, and that you are also aware of various “tradeoffs” you might need to make in order to receive all of the benefits you need.

That’s where we come in!

Annuity and Retirement Income Planning Information You Can Trust

If this is the very first time you have visited our AnnuityGator.com website, then please allow us to personally welcome you here. We are a team of highly knowledgeable financial pros who are focused specifically on offering very in-depth and unbiased annuity reviews. We have been at this for quite a number of years now – much longer than our competitors – and because of that, we’ve become a go-to source for annuity information.

If you have been in the process of compiling more information on an annuity that you’re considering purchasing, then you have more than likely come across a lot of conflicting information about these products online. This really is not surprising, though, as there is a myriad of details available about these products. There is also a wide range of opinions about them, too.

If you are interested in knowing more about The State Life Insurance Company’s Annuity Care ll product, though, you are definitely in the right place. In fact, we dare say that our website is the only place online where you will be able to get all of the key details on this financial vehicle – both the good and the bad. This, in turn, can assist you with making a much more well-informed decision about whether or not Annuity Care ll fits in with your overall financial goals.

So, if you are ready to begin the review, let’s go ahead and jump in!

The State Life Annuity Care ll Policy at a Glance

Product NamePower Index Advisory
IssuerAmerican General / AIG
Type of ProductFixed Indexed Annuity
A.M. Best RatingA+ (Excellent)
Phone Number(800) 445-7862

Opening Thoughts About the Annuity Care ll Product from State Life Insurance Company

OneAmerica is made up of a family of companies that offer a wide range of insurance and annuities. The State Life Insurance Company, which is a OneAmerica company, provides asset-based long-term care products. In doing so, it utilizes life insurance, plus fixed interest deferred and immediate annuities – some that contain long-term care insurance riders.

For more than 140 years, OneAmerica has been serving its customers and policyholders – including through some rough financial times, like the Great Depression and the 2008 Great Recession.

As of year-end 2018, The State Life Insurance Company held roughly $8.5 billion in assets and had nearly $13 billion of total life insurance in force. The company’s assets under management were in excess of $77 billion, with 2018 revenue of $2.2 billion.

For more details regarding The State Life Insurance Company, you can go HERE.

Due in large part to its financial stability and stellar claims-paying reputation, OneAmerica has received very high ratings from the insurance carrier rating agencies. These include an A+ from A.M. Best, and a AA- from Standard & Poor’s.

As life expectancy is much higher today than in years gone by, people are in need of protecting themselves from running out of income in retirement, as well as the high cost of long-term care. But, while annuities can take care of the lifetime income component, stand-alone long-term care insurance policies are quite expensive – and they can be even more so if someone pays a premium for many years, but ends up never needing the benefits.

That’s where the Annuity Care ll product from The State Life Insurance Company/OneAmerica can help.

The State Life/OneAmerica’s Annuity Care ll product features two options that take advantage of the 2006 Pension Protection Act, a tax law regarding annuities with long-term care benefits. This legislation allows policyholders to take tax-free distributions from life insurance and annuity policies to pay their long-term care insurance premiums. With that in mind, Annuity Care ll could provide a win-win situation.

But don’t get out your checkbook just yet!

Before we get into the gritty details, here are some legal disclosures…

This is an independent product review, not a recommendation to buy or sell an annuity. OneAmerica has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular annuity. Prior to purchasing any type of investment or insurance product, it is important that you do your own due diligence and that you consult a properly licensed professional if you should have any specific questions that relate to your individual circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.

For more information on how to compare annuities in order to determine which one may be right for you, to obtain our free annuity report.

How OneAmerica/The State Life Insurance Company Describes the Annuity Care ll Plan

OneAmerica/The State Life Insurance Company describes the Annuity Care ll as a guaranteed interest rate annuity that is combined with the protective elements for end of life care.

This single premium fixed deferred annuity can provide long-term asset growth, with protection from care costs built directly into the annuity. The single premium contribution grows at a minimum interest rate. If you never need long-term care, then the accumulated value will pass to your heirs at your death.

At the same time, your premium grows at a second, higher interest rate for long-term care needs. This is referred to as the LTCAV, or Long-Term Care Accumulated Value. The Annuity Care ll allows you to extend the value of this protection beyond the annuity’s LTCAV by automatically including a Continuation of Benefits, or COB, Balance.

The COB will become effective after the LTCAV has been reduced to $0 due to long-term care related withdrawals. This additional protection can be purchased via a charge that is deducted monthly from the annuity’s value

Annuity Care ll can also provide you with some tax-related benefits. For instance, the long-term care benefit payments from the LTCAV are income-tax-free, as a reduction of the plan’s cost basis.

Likewise, the long-term care benefit payments from the COB balance are also income tax-free. And, the monthly charge to pay for the COB balance is income tax-free as a reduction of the basis in the LTCAV.

For more details on the Annuity Care ll, you can view the product brochure HERE.

How an Insurance or Financial Advisor Might “Pitch” this Product to You

If you have been presented the Annuity Care ll by an insurance or financial advisor, it is likely that they have highlighted the key benefits, such as flexibility, and a good alternative to a “use it or lose it” stand-alone long-term care insurance plan.

But there are a few things that you need to be aware of before you make a long-term commitment to this plan. First, there are some pretty stringent qualifying criteria. In this case, in order to be eligible for benefits, you must be diagnosed as chronically ill – either physically or cognitively – and you must have qualified long-term care services that are provided to you pursuant to a plan of care that is prescribed to you by a licensed health care practitioner.

For instance, in order to trigger the long-term care benefits, you must not be able to perform at least two basic daily living activities, such as:

  •  Bathing
  •  Dressing
  •  Eating
  •  Continence
  •  Toileting
  •  Transferring

Alternatively, you must be diagnosed with a cognitive impairment.

In addition, unlike individual annuities, the Annuity Care ll product will require you to pass medical underwriting. So, if you have certain pre-existing health conditions, there is a chance that you may not qualify for the Annuity Care option.

The Annuity Care ll brochure can be accessed HERE.

Fees on the Annuity Care ll from The State Life Insurance Company

In addition to the underwriting limitations with Annuity Care ll, you may also find that there are some fees incurred if you purchase this type of policy. For instance, if you own this plan and you decided to take your money out of it early (i.e., during the surrender period), then you will not only face a penalty (surrender fees), but the funds you receive could also be subject to income tax.

Plus, you also have to keep in mind that if you make such a withdrawal before you have turned age 59 ½, you could incur an additional 10% “early withdrawal” penalty from the IRS. With that in mind, it is really important that you only fund the Annuity Care ll plan with money that you won’t need later on for an emergency or other financial obligation.

The Annuity Gator’s End Take on Annuity Care ll from The State Life

Where it works the best:

There are some nice features offered on the Annuity Care ll from The State Life Insurance Company. Given that, this product could fit well into your overall financial plan if you:

  •  Aren’t sure you’ll need long-term care, but don’t want to risk having to pay the cost.
  •  Have a long life expectancy and feel that you’ll need costly long-term care services in the future.
  •  Don’t want to purchase a “use it or lose it” stand-alone long-term care insurance policy.

Where it works the worst:

Annuity Care ll isn’t for everyone, though. For instance, this plan may not work well if you:

  •  May need the money for other obligations within the policy’s surrender charge period.
  •  Have a shorter life expectancy.
  •  Don’t want to pay the added charge for the COB benefit.
  •  Already have a health condition that could disqualify you from the underwriting process.

In Summary

No one has a crystal ball. So, without knowing what to anticipate for the future, planning can sometimes be difficult. But the reality is that you can still reduce a lot of added stress by being prepared for large potential expenses such as long-term care.

The Annuity Care ll from The State Life Insurance Company can certainly provide you with a good way to cover more than one need with just one single product. Plus, if you never require long-term care, the benefits in this product won’t go to waste.

That being said, the only way to know for sure if Annuity Care ll is right for you is to have it tested. At Annuity Gator, we can help you to compare this product side-by-side with other annuities and annuity-related vehicles and see which – if any – may be best for you.

If you’d like to “test drive” the Annuity Care ll– or for that matter, any annuity product – just contact us and we’ll get one of our trained annuity “geeks” on it right away!

Do You Still Have Questions About Annuity Care ll? Would You Like to See Any Other Annuity Products Reviewed?

We realize that this annuity review may have run a bit long. But quite frankly, we would much rather know that you have “too much” information on this product than not have enough. So, if you found this annuity review to be beneficial, please feel free to pass it on and to share it with other people who could also find value in it. (And, if you found it to be confusing, please also let us know that, too.)

In addition, we are aware that information regarding annuities can, and often does, change. So, if you happened to notice anything in this review that should be updated or revised, let us know and we will be happy to make the necessary edits.

Any other annuities that you would like to learn more about?

If so, just give us a shout and let us know, and our team will get to working on them right away.


The Annuity Gator

P.S. If you would like to read more of our OneAmerica annuity reviews here are some links to check out: