An annuity care is a type of annuity that provides benefits for long-term care expenses if you need them³⁵. An annuity is a contract between you and an insurance company, where you pay a lump sum or a series of payments in exchange for a regular income stream for a certain period of time or for life⁵. An annuity care can be either an immediate or a deferred annuity³⁵.

- An **immediate annuity care** is also known as a **care funding plan** or an **immediate needs annuity**⁴. It is designed for people who are already in need of long-term care and want to secure a guaranteed income to pay for their care fees⁴. You pay a single premium to the insurance company, and they pay you a monthly income for life that is tax-free if paid directly to the care provider⁴. The amount of income depends on your age, health, gender, and the cost of care in your area⁴.

- A **deferred annuity care** is also known as a **long-term care annuity**³. It is designed for people who want to plan ahead for the possibility of needing long-term care in the future³. You pay a single premium or a series of payments to the insurance company, and they pay you a monthly income for life if you become unable to perform two or more activities of daily living (such as bathing, dressing, eating, etc.) or suffer from cognitive impairment (such as Alzheimer's disease)³. The income is tax-free if used for qualified long-term care expenses³. The annuity also has a cash value that you can access for other purposes or leave to your beneficiaries³.

Some advantages of an annuity care are:

- It can help you cover the high cost of long-term care without depleting your savings or relying on government programs³⁵.

- It can provide you with peace of mind that you will have a steady source of income to pay for your care needs regardless of market fluctuations or interest rates³⁵.

- It can offer you flexibility in choosing where and how to receive your care, such as at home, in an assisted living facility, or in a nursing home³⁵.

Some disadvantages of an annuity care are:

- It can be expensive to buy, especially if you are older or have health issues that increase your risk of needing long-term care³⁵.

- It can reduce your liquidity and limit your access to your money, since you have to pay a large sum upfront or lock in your payments for a long period of time³⁵.

- It can reduce your estate value and inheritance for your heirs, since the insurance company will keep any remaining funds after you die unless you have a refund option or a death benefit³⁵.

An annuity care is not for everyone. It may be suitable for people who have sufficient assets to afford the premium, who want to protect themselves from the risk of outliving their savings, and who want to leave some money to their loved ones. However, it may not be affordable or available for people who have limited income, who need immediate access to their money, or who have other sources of funding for their long-term care. You should compare different options and consult with a professional insurance advisor before deciding whether an annuity care is right for you.

(1) Long Term Care Annuity Rider: How It Works, Pros and Cons. https://www.annuity.org/annuities/riders/long-term-care/.

(2) Long-Term Care Annuity: Best Long-Term Care Insurance (2023). https://www.annuityexpertadvice.com/types-of-annuities/long-term-care-annuity/.

(3) Buying a care annuity to pay care fees - Paying for care. https://www.payingforcare.org/buy-a-care-annuity/.

(4) OneAmerica | Indexed Annuity Care. https://www.oneamerica.com/indexed-annuity-care.

(5) Long-Term Care Annuities: Pros and Cons - SmartAsset. https://smartasset.com/financial-advisor/long-term-care-annuity.