VA Annuity

Qualify Your Client for the VA Pension Benefit

A VA Annuity allows a qualified veteran or their surviving spouse to obtain the VA pension benefit. It’s revocable, assignable, and does not jeopardize future Medicaid eligibility. This revolutionary product provides:

Accelerated VA Eligibility
Supplemental Income
Flexible Planning Options
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A VA Annuity is a Single Premium Immediate Annuity (SPIA) that eliminates excess countable assets and converts it into an income stream. This allows the VA claimant to become eligible for the VA Aid & Attendance benefit so they can pay for care at home or in an assisted living facility. It can also be converted to be “Medicaid compliant” at any time, in case the claimant needs to enter a skilled nursing facility.

For 2018, the monthly pension rates are as follows:
Single Veteran
Base Pension $1,097
Housebound $1,340
Aid & Attendance $1,830
Married Veteran
Base Pension $1,436
Housebound $1,680
Aid & Attendance $2,169
Surviving Spouse
Base Pension $735
Housebound $899
Aid & Attendance $1,176
Veteran Married to Veteran
Base Pension $1,436
Both Housebound $1,923
Both Aid & Attendance $2,903
A VA Annuity might be right for your client if they
Are a qualified veteran or their surviving spouse.
Require care at home or in an assisted living facility.
Have medical costs that exceed their income.
Have net worth above $30,000.

Level-Pay VA Annuity

Goal: Create a moderate stream of monthly income and obtain eligibility for the VA Aid & Attendance benefit.

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Balloon-Style VA Annuity

Goal: Create a small stream of monthly income and obtain eligibility for the VA Aid & Attendance benefit.

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Product Features and Availability
Level-Pay VA Annuity
Balloon-Style VA Annuity
Service Requirements
Physical Requirements
Financial Requirements

The VA Annuity is available in 48 states and the District of Columbia. It is revocable and assignable as to the beneficiaries. It can be funded with either non-qualified or tax-qualified funds, and level-pay and balloon-style payout options are available. The minimum investment amount is $5,000, and the minimum term length available is two months, in most states. The contract owner can elect to make a one-time conversion to turn the VA Annuity into a Medicaid Compliant Annuity.

A Level-Pay VA Annuity provides the owner equal, monthly payments.  Its purpose is to convert excess net worth into a moderate stream of income. The excess net worth is immediately eliminated and the owner is able to accelerate eligibility for VA benefits.  The term of the annuity should be structured so that their total income does not exceed their UMEs and they can maintain a negative IVAP. We also recommend the term length not exceed the person’s Medicaid life expectancy in case the annuity needs to be converted to be Medicaid compliant in the future.

In cases where using a Level-Pay VA Annuity would provide too much income, the claimant could consider using a Balloon-Style VA Annuity.  This annuity converts excess net worth into a minimal stream of income. Monthly payments throughout the term of the annuity are small, except for the final payment (the “balloon” payment), which is larger.   The owner can choose either the amount of the monthly payments or the amount of the balloon payment.  Prior to receiving the balloon payment, they can elect to continue/rollover the contract. If they are still receiving VA benefits at that time, this will prevent them from losing eligibility.  This option is especially popular when dealing with large IRAs.

For a veteran or their surviving spouse to be qualified for the non-service connected VA pension, the veteran must have served 90 days active duty, with at least one day during an official period of war. The eligible wartime periods may be found here. Additionally, the veteran must have received a military discharge other than dishonorable conditions.  This information may be found on the veteran’s DD 214.

The claimant must be permanently and totally disabled and/or in need of the daily aid and attendance of another person to live safely in their environment.  If they are over the age of 65, they are presumed to meet the “permanently and totally disabled” requirement.  A physician’s affidavit may be required to confirm their health status. In the case of a married couple, the veteran must always be the claimant in need of care.  If the spouse is in need of care and the veteran is healthy, they will not qualify.

The VA states the claimant must have “low monthly income.”  To satisfy this test, they must have a negative IVAP (“Income for VA Purposes”).  The IVAP is calculated by deducting their recurring, unreimbursed medical expenses from their income.  If the IVAP is positive, the VA benefit will be reduced dollar-for-dollar until the claimant is ineligible.  The VA also states the claimant must have “nominal assets.”  While there is no set dollar amount, our office recommends retaining no more than $20,000-$30,000 in assets, based on age and marital status.