ANNUITIES SR 04-08, 02/04 (FAM-A)

An annuity is a financial investment on which a person receives fixed payments for a lifetime or a specified number of years.

For purposes of determining eligibility for all categories of financial and medical assistance, an annuity owned by an individual applying for assistance must:

• have a principal which is not accessible to the individual;

• be actuarially sound in that the expected return on the annuity corresponds with the life expectancy of the individual (See Adult Assistance Manual PART 420, RESOURCE TABLES: SSA LIFE EXPECTANCY TABLES: MALE, or Adult Assistance Manual PART 420, RESOURCE TABLES: SSA LIFE EXPECTANCY TABLES: FEMALE.)

• have a payment structure that provides equal or near equal payments for the duration of the annuity and does not allow for any final "balloon" type payments; and

• have the State of New Hampshire as the:

- primary beneficiary, if the individual has no spouse, minor child, or permanently and totally disabled child at the time the annuity is purchased; or

- contingent beneficiary in the event that the primary beneficiary is the individual’s spouse, minor child, or permanently and totally disabled child.

NOTE: If the individual does have a spouse, minor child, or permanently and totally disabled child at the time that the annuity is purchased but none are identified as the primary beneficiary, the State of New Hampshire must be identified as the primary beneficiary; however, if the individual predeceases the duration of the annuity and there is a surviving spouse, minor child or permanently and totally disabled child, the State of New Hampshire will not recover from the annuity benefit.

Treatment: Excluded Resource. Forward a copy of the annuity to the Office of Finance, Estate Recoveries Unit.

Exception: If the annuity does not meet all the conditions indicated above, the entire principal of the annuity is considered a countable resource.

NOTE: Monthly disbursements from the annuity count as unearned income to the individual. (See PART 511, COMMON TYPES OF INCOME: ANNUITIES)