Linking Reverse Mortgages with Long Term Care Insurance still ok to Generation
By jana on Mar 26, 2008 in Long Term Care Insurance, Reverse Mortgage
Generation Mortgage is watching out for its clients, but is this self regulation the beginning of too much regulation? Last Friday Generation Mortgage announced their new policy to "safeguard Seniors from buying unsuitable financial products with reverse mortgage proceeds." In their eyes, there is a clear distinction between "suitable and unsuitable products for seniors." Examples of unsuitable: deferred annuities with surrender charges and long term CDs with early withdrawal penalties. Still good are immediate annuities and long term care insurance.
So far…ok. I understand the logic of these limitations. Anything deferred with penalties involved defeats the purpose of the reverse mortgage. This type of mortgage can be structured similar to an immediate annuity, so I am not sure why that isn’t on the list too. If you can structure the reverse mortgage to make immediate payments to you, why would you spend additional fees and a commission to someone to then set up an annuity? If anyone knows what the benefit might be, please let me know.
Glad to see that Long Term Care insurance is still on the "good" purchase list!
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