The customer applied for ALTCS and used $20,000 of his resources to purchase an immediate annuity from the ABC Insurance Company. The annuity does not name AHCCCS as the primary beneficiary.
The contract date is 9/15 and the first payment will be issued on 10/15.
The annuity will issue payments of $200 per month for 10 years in 120 monthly payments. This would result in a return of $24,000 over the period of the contract.
The customer is currently 79-years-old and has a life expectancy of 7.40 years or 88.8 months. At $200 per month, the contract will pay out $17,600 over the customer’s life expectancy.
In this example, the annuity was purchased from a life insurance company, will issue regular monthly payments and is currently issuing payments.
However, the annuity does not meet the requirements to name AHCCCS as the primary beneficiary and does not provide for full return of principal and interest during the customer’s life expectancy. The full purchase price of the annuity is a transfer with uncompensated value.