ANNUITY EXAMPLES ANSWERS 1112022 Maximizing Annuity Payments Male

ANNUITY EXAMPLES ANSWERS 1/11/2022

Maximizing Annuity Payments Male applicant, age 71 Principal = $73, 000 1/11/2022

Maximizing Annuity Payments Answer: $73, 000 ÷ 12. 13 $ 6, 018. 14 ÷ 12 $ 501. 51 1/11/2022 principal life expectancy, male 71 maximized yearly payments months maximized monthly payment

MEC Dollar For Dollar Plans & Annuities Applicant has $160, 000 total countable resources $70, 000 Annuity $90, 000 “Other” Countable Resources Dollar for Dollar Plan has paid out $120, 000 1/11/2022

MEC Dollar For Dollar Plans & Annuities Answer: $ 70, 000 + 90, 000 160, 000 - 120, 000 $ 40, 000 - 13, 800 $ 26, 200 annuity “other” resources countable resources protected assets resources counted toward eligibility MA level for 1 excess Resources Since this annuity is a countable resource at time of application for MEC, the Dollar for Dollar Partnership policy/certificate holder may use the asset protection earned by the Partnership insurance to establish resource eligibility Since the Dollar for Dollar asset protection is not sufficient to disregard the entire value of the annuity, the portion of the annuity value not disregarded is a countable resource The applicant would not be required to maximize his/her payments on the annuity regardless of whether the Dollar for Dollar asset protection is sufficient to disregard the entire value of the annuity or not 1/11/2022

Annuity & Transfer Female applicant applies today Annuitized an annuity 12/05 @ age 73 Payments of $200/month Principal was $150, 000 1/11/2022

Annuity & Transfer Answer: Annuity annuitized before 2/8/06 $ 200 x 12 $ 2, 400 x 13. 28 $31, 872 monthly payment months yearly payments life expectancy @ 73 lifetime payments $150, 000 - 31, 872 $118, 128 principal @ time annuity is annuitized lifetime payments uncompensated transfer 1/11/2022

Annuity & MEC Dollar For Dollar Plan 79 year old male Applicant for MEC has $250, 000 paid out by plan Otherwise eligible January 2011 Purchased a $160, 000 annuity July 2007 Receiving maximized payments of $1700/m that started December 2010, and refuses to name the State as beneficiary $110, 000 total countable resources 1/11/2022

Annuity & MEC Dollar For Dollar Plan Answer: $250, 000 - 110, 000 $140, 000 paid by plan countable resources remaining asset protection $160, 000 - 1, 700 $158, 300 - 13, 800 $144, 500 - 140, 000 $ 4, 500 annuity transfer payments received uncompensated transfer MA level for 1 remaining transfer remaining asset protection uncompensated transfer The district must note in the case record that $140, 000 of the DDAP was used to offset a transfer of assets as this amount cannot be reused at renewal. At renewal, resource eligibility will be determined using a DDAP of $110, 000 ($250, 000 $140, 000). 1/11/2022

Annuity & Transfer Male Applicant Purchased a $70, 000 deferred annuity in 2005 Payment of $625/m deferred until June 2010 Payments of $625 began June 2010 @ 76 years of age 1/11/2022

Annuity & Transfer Answer: $70, 000 ÷ 9. 29 $ 7, 534. 98 ÷ 12 $ 627. 92 purchase price life expectancy @ 76 yearly payments months maximized monthly payment This annuity is actuarially sound and not considered an uncompensated transfer. Since no transactions have occurred on or after 2/8/06 DRA rules do not apply in this situation, therefore, the A/R would not have to name the State as beneficiary on this annuity 1/11/2022

Annuity & Transfer Male Applicant September, 2011 In receipt of nursing home services And otherwise eligible October, 2011 Purchased a $75, 000 annuity 2003 Payments of $995/m deferred until November 2008 Payments of $500/m started 11/1/08 @ 82 years old 1/11/2022

Annuity & Transfer Answer: $75, 000 ÷ 6. 42 $11, 682. 24 ÷ 12 $ 973. 52 purchase price life expectancy, male @ 82 yearly maximized payments monthly maximized payments This annuity has a transaction after 2/8/06 (deferred payment of $995 changed to $500) therefore it must be irrevocable and non assignable, actuarially sound, with equal payments and no deferral and balloon payments. This annuity does not meet these requirements because it is not actuarially sound. Therefore the purchase price of the annuity less any monies actually received from the annuity is considered an uncompensated transfer. The applicant has received 35 months of payments (November 2008 – September 2011) $500 x 35 = $17, 500 $ 75, 000 purchase price - 17, 500 payments received $ 57, 500 uncompensated transfer 1/11/2022

Annuity & Transfer Female applicant, Broome Co, Applies and is otherwise eligible Dec. 2010 Purchased a $110, 000 deferred annuity in April 2006 Payment a $383/m deferred until October 2008 Annuitized October ‘ 08 at 59 years of age, Payment amount = $383/m Countable resources @ application = $12, 600 $12, 000 irrevocable burial fund which includes $1500 of non -burial space items

Annuity & Transfer Answer: $110, 000 ÷ 23. 89 $ 4, 604. 44 ÷ 12 $ 383. 70 purchase price life expectancy, female @ 59 yearly payment months maximized payments This annuity is a deferred annuity purchased after 2/8/06 and subject to DRA rules. Since it is a deferred annuity, the purchase of the annuity would be considered a transfer. However, a transfer penalty is not imposed because the A/R is receiving the maximized payment amount.