General

In the Medicaid eligibility context, an annuity is a financial product someone purchases, with a lump sum of funds (called the “premium”), that guarantees a stream of payments for a certain period.

Because some annuities can be converted into cash (sold, assigned, or transferred), an annuity is evaluated to determine whether it is a resource or not.

Because all annuities provide a stream of payments, if an annuity is not a resource, then the stream of payments is unearned income.

Because the purchase of an annuity is an asset transfer, annuities are evaluated to determine whether there is uncompensated value for the purposes of long-term care (LTC) Medicaid penalties.