Washington LTC Payroll Tax Opt-Out

Unfortunately, we are no longer offering private LTC policies

LTC Status Grid

How to Register for Exemption with Washington State AFTER your LTC policy is issued.

DEADLINE IS OCTOBER 31, 2021

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A service division of Leverage Planners Wealth Management

LTC Status Grid

How to Register for Exemption with Washington State AFTER your LTC policy is issued.

Aug 20 Alert: ALL Options GONE, except ONE! LAST HELICOPTER OUT!!!

Listen to Dave explain or read the option details below

Read Option 1 Details Here

August 9^th, Monday, this product will be SUSPENDED until further notice.

ALL applications from August 5^th forward are “At Assumed Risk” (meaning their timely processing and approval cannot be guaranteed.)

Age 30 by Nov. 1, 2021 (minimum age required for this solution)
$50,000 minimum insured LTC cash account deposit, Zero Fees
Tax-free LTC Benefit is typically 2.5-3 times cash deposits (depending on health underwriting)
Zero Fees for this policy
Zero interest paid on deposits
100% cancellable, (any time after tax exemption)
100% refundable, and penalty-free, (any time after tax exemption)

Read Option 2 Details Here

A. Individual:

Ages 18-49 = $36,500 minimum Non-Qualified deposit

Ages 50+ = $35,000 minimum Non-Qualified deposit ($36,500 after October 6^th)

Ages 59.5+ = $50,000 minimum IRA/Roth-IRA deposit(Suspended after October 6^th)

B. Joint: YES! Joint is BACK!
(Joint Policy offers will be Suspended after October 6^th, returning after November 1^st)

Ages 50+ = just $35,000 minimum Non-Qualified deposit

Tax-free LTC Benefit is typically 2-3+ times cash deposits (depending on health underwriting)

Zero Fees for these policies

2% interest currently paid on cash deposits

100% cancellable and refundable, at 9% cancellation fee, if cancelled in full PRIOR to 10th year,

*or*

100% cancellable and refundable, 100% penalty-free, if cancelled AFTER the 10th year,

*or*

10% (1/10th of balance) cancellable and refundable, 100% penalty-free, EVERY anniversary

Read Option 3 Details Here

SUSPENDED IMMEDIATELY

~~Effective IMMEDIATELY, all applicants under age 35 for Option #3 are suspended, and will be recommended to Option #2 (the only remaining option for ages under 35.)~~

~~A. Individual: Ages 18+ 35+~~

$2,500/yr minimum annual premium

LTC Benefit typically starts $200,000+ (determined by health underwriting,)

B. Joint: Ages 35+

Aug 17: suspended

~~$3,000 minimum annual premium~~

~~Marriage NOT required, (parent/child, siblings, friends, business partners, etc. OK)~~

~~Age spread must be no greater than 25 years~~

LTC Benefit typically starts $50,000+ (determined by health underwriting,)

100% Cancellable penalty-free HOWEVER, No premium refunds

Read Option 4 Details Here

Effective IMMEDIATELY, LTC benefits suitable to qualify to Opt-Out of WA Payroll tax are temporarily SUSPENDED IMMEDIATELY.

All applications for Option #4 are suspended, and will be recommended to Option #1 or #2.

Strategic redesign can commence after suspensions are removed.

Ages 18+, Individual Policies only
Minimum $50,000 deposit over 5+ years
As low as $5,000 year 1
Income Tax-Free Roth-Alternative retirement Life/LTC policy
(Reference: IRC 7702)
Qualifies for WA payroll tax exemption
LTC Benefit starts at $250,000 minimum
Unused LTC Benefits become Tax-Free Life Insurance Benefits
15+ year duration product design
No IRS income phase-out restrictions, available to all income levels (unlike Roth IRA/401k)
No IRS contribution restrictions, suitable to higher earners (unlike Roth IRA/401k)
50-90% mid-term tax free liquidity (with re-contribution privileges) available (unlike Roth IRA/401k)
Cash account can grow annually base on market-index linked interest
Contributions and annual gains are protected from subsequent market losses
Contribution pay-ins are flexible, allowing variation to fit cashflows
Contribution plans can be decreased any time without underwriting
Contribution plans can be increased with additional health underwriting

BEST GROWTH DESIGN APPROACH;

Determine maximum capital contributions over future 10-15 years desired to compound tax-free

Apply for a policy designed for the MINIMUM required LTC/Life benefits that retain IRC 7702 tax-free provisions

With flexibility permitted, add capital to fit max funding design as fast as cashflows allow

STRATEGY NEGATIVES:

Long term commitment

Requires more complete health exam and underwriting

Requires initial multi-year contribution planning (actual contribution amounts can be flexible)

Premature policy cancellation subject to substantial penalties

Annual market upside growth is typically capped or fractionated, and rarely supercedes 20% annual interest

Initial dollar contributions incur 1st year expense burdens of 6-8%, subsequently declining in expenses annually.

Gross total annual average fees typically drop to or below 1% by 15th-20th year (thereby roughly equalling traditional portfolio management fees, without traditional portfolio loss risks.)

*Guarantees backed by the claims paying strengths of the offering insurance companies.

Questions & Answers

Question: I got the policy disclosures, and it says the ‘guaranteed rate’ is just 1% (or it might say .03%, or some other number,) and I thought all the policies are paying 2%… what gives?

Answers:
1. In the insurance language, the term “guaranteed” means “can never go below.” The rate actually paid is frequently called the “current” rate, or “declared” rate, and is generally reset each anniversary to the then-going market rate for that product.

2. The hurdles for approvals of various products from various insurance carriers have been wildly shifting throughout the last 90 days, and (especially for Option #2, with a bare minimum of deposits required,) we have been placing each applicant in the product with the best terms offered (generally prioritizing on lowest minimum premium required,) for their age class and health status. SOME of these have been as follows at various stages;

> GILICO @ 2% declared, 1% guaranteed

> Global Atlantic/Forethought @ 2.75% declared (minus age-based LTC fee, typically 0.6 to 2.0%,) 1% guaranteed

> OneAmerica ($20k min,) @ 1% cash growth rate, 1.05% LTC growth rate.

3. Our “triage mode” and “life boat” mode has been to place each applicant in the option costing them the least to qualify to get out of the WA Payroll Tax, with the shortest application/review/underwriting turn time queue,

4. NONE of these “minimum deposit” solutions are truly suitable for proper LTC protection planning… if you want to protect your spouse and family from realistically expectable critical, chronic, home-based and institutional support expenses, we encourage sitting down with us to develop out a more comprehensive plan. In most cases the immediate “minimum” solution you’ve acquired can be transferred into a more comprehensive plan.

5. NONE of these “immediate fix” solutions are optimized for wealth accumulation. If you want both family protection *AND* tax-advantaged accumulation features, *THIS TOO* can be done… and it can be done arguably giving you equal or better features than the products required for the Payroll Tax exemptions, however the better products would not themselves qualify for the exemptions (because you would be provided “too much control” over your benefits in the better products.) If THIS is what you prefer, we also encourage scheduling to sit down with us for a more comprehensive plan that your current solutions can then be transferred into over time.

Question; Can I pay my premium with a credit card (because, you know, “benefits points!”)

Answer: At present you can pay up to $3,000 on a credit card if you have a OneAmerica policy, and the rest of the balance can be deposited using an ‘eCheck’ (basically an EFT draft established with a voided check copy.)

Question: Is there a policy document that shows my coverage?

Answer: Yes, your contract upon issuance will show the final determined offer of benefits. (Yes, that comes *AFTER* you have already paid your premiums, generally, if you paid with application to secure prioritized underwriting… however, remember, all policies always come with a 30 day free cancellation or transfer period, so you are not at risk of being trapped by the insurance company.)

Question: Is there a document that shows the clause about 10% return of premium per year?

Answer: Yes, in both the initial application disclosures, and the final contract, there will be a “free withdrawal” clause, or page… generally with a grid showing the annually declining surrender charges for withdrawing funds faster than the 10% annual free allowance.

Question: If I don’t take 10% each year, but wait until year 5, can I draw 50% without penalty?

Answer: No, on most cash value annuity and insurance products the free withdrawal allowance resets each anniversary. It generally does not accumulate as an increasing annual free withdrawal allowance.