Medicaid Friendly Annuities
Many people who are planning on getting Medicaid assistance also prepare to protect their assets from being used up. They may be thinking of making sure that their spouse would be taken care of in their absence. They may also be preparing for the welfare of a child with disability or other valid reasons. Medicaid friendly annuities are usually availed of to protect their assets and prepare for the worst.
A number of people, mostly providers, know that specific kinds of annuities can prevent depletion and provide protection for peoples assets. These annuities have particular terminologies that make them Medicaid friendly under specific guidelines. Other annuity policies are not eligible since they do not have these specific terms and words.
An individual can avail of annuities that will provide a monthly payout for their life expectancy. This annuity contract must be definite and agreed upon by all groups concerned where the amount will be the monthly income of the recipient. Sometimes called “the name on the check rule”, this is permitted in 29 states of the United States and is essentially included in the contract.
Problems sometimes are encountered when an agent of the provider of the annuity is not knowledgeable to the rules or the guidelines that must be followed in order for Medicaid to consider it as a friendly annuity. Some agents sell standard annuities to people, telling them that their assets will be protected, even though if this specific annuity is not considered Medicaid friendly. This usually happens because some agents just want to make a sale in order to get big commissions. Standard annuities typically have higher commissions versus Medicaid friendly annuities. Some agents deliberately sell people annuities that are never going to meet the criteria to be a Medicaid friendly annuity. They convince this people to buy these annuities by telling them of features that eligible annuities have. Liability becomes a problem and agents can always deny they said the wrong things to clients or they may not be connected with the providers anymore.
Some people only discover that the annuities they obtained are not Medicaid friendly when they are at the situation that they have tried to plan and prepare for. They may become ill and need nursing home care, only to realize that their assets are not protected by the annuity they got long ago. This is very unjust for the client since they did not know that the agent who sold them the annuity was not very truthful. Most of the time people end up suffering large losses in their assets and surrender their annuity to pay for health care costs.
Many dependable providers who are trying to uphold the reputation of their business always remind their agents and other companies to be truthful and honest. They should never call themselves as Medicaid specialists nor should they give legal advice to their clients. If they need to dole out legal advice, they should work with an attorney who concentrates in Medicaid planning together with the client. In the end they should make sure that their potential client fully comprehends how they would benefit from Medicaid friendly annuities.