FAQ’s

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We are more than just a product provider. We are a full-service, strategic partner in building your practice. Use our Frequently Asked Questions to gain a better understanding of who we are and how to work with us.

ABOUT KRAUSE FINANCIAL SERVICES

Q: HOW DO I WORK WITH KRAUSE FINANCIAL SERVICES?

A: We understand time is very important when dealing with Medicaid and VA benefits. Therefore, obtaining an annuity through us is an easy and streamlined process. Our benefits planners will work with you to determine the most appropriate plan for your client. For a full explanation of the process, visit our “How To Work With Us” page.

Q: WHY SHOULD I WORK WITH KRAUSE FINANCIAL SERVICES?

A:We have over 25 years of crisis Medicaid planning experience, working with elder law attorneys and helping build practices across the nation. We have earned the distinct reputation of the “Pioneer of Medicaid Compliant Annuities.” Thousands of elder law attorneys trust us with their clients’ cases. Learn more on our “What Our Clients Are Saying” page.

Q: WHAT SERVICES DOES KRAUSE FINANCIAL SERVICES OFFER?

A: We are a full-service, boutique crisis planning firm. We offer one-on-one case guidance, Medicaid planning case analysis and Veterans Benefits planning case analysis. We want to be your strategic partner for all things related to crisis planning. All our services can be found on our “Services” page.

Q: WHAT PRODUCTS DOES KRAUSE FINANCIAL SERVICES OFFER?

A: We are the nation’s leading provider of Medicaid Compliant Annuities. We also offer VA Annuities, irrevocable funeral expense trusts, whole life insurance, refusal letters, tax-deferred annuities, and other products. All our products can be found on our “Products” page.

Q: WHY SHOULD I CONSIDER ADDING ELDER LAW TO MY PRACTICE?

A: Attorneys who practice elder law have the unique opportunity to make a big difference in the lives of older Americans.  The 65+ age group is projected to nearly double by 2030, and an estimated 70% will require some form of long-term care within their lifetime. Due to the high cost of long-term care, many simply will not be able to pay without exhausting their life savings and will turn to programs like Medicaid to help cover the costs. Elder law attorneys can provide simple solutions that make a big difference in these families’ lives.

Q: WHERE IS KRAUSE FINANCIAL SERVICES LOCATED?

A: Our main office is in De Pere, WI, but we work nationwide. We are available Monday through Friday, 7:00 a.m. to 5:00 p.m. Central Time, through phone and email.

Q: ARE YOU FAMILIAR WITH MY STATE’S REGULATIONS?

A: We are up-to-date on all state-specific case decisions, laws, regulations, and updates. Our goal is to empower elder law attorneys across the nation by providing customized support, education, products, and services.

Q: DO YOU WORK DIRECTLY WITH MY CLIENT TO COMPLETE THE PURCHASE?

A: While we are happy to assist your clients with any questions they may have regarding the annuity purchase, the elder law attorney is our preferred point of contact. For a full explanation, visit our “How To Work With Us” page.

Q: I AM A LICENSED INSURANCE AGENT. CAN I SELL YOUR ANNUITIES MYSELF?

A: Yes. You can get appointed through The Krause Agency to sell our annuities. Please visit www.thekrauseagency.com for more information.

Q: HOW CAN I LEARN MORE ABOUT MEDICAID AND VA PLANNING?

A: As the national leader, we take pride in our education services and our position as a thought leader in the elder law industry. Our tireless research allows us to leverage our knowledge into comprehensive, practical educational resources. Visit our “Education and Training” page for more details on our educational resources.

Q: WHAT IF MY CLIENT RECEIVES A DENIAL?

A: In the event of a denial, simply contact the benefits planner you were working with on the case and provide a copy of the denial for our review. Our office can assist attorneys with denials and is willing to provide fair hearing support and expert testimony if necessary.

PROCESS Q&AS

Q: DO I HAVE TO WORK WITH AN ELDER LAW ATTORNEY?

A: While it is not required, we strongly encourage you to work with an elder law attorney. If you do not have an elder law attorney, we would be happy to recommend one.

Q: HOW DO I BEGIN A CASE WITH KRAUSE FINANCIAL SERVICES?

A: Please fill out our online quote request form [link] or download our intake sheet. [link] If you’d prefer to speak with someone directly, you may call our office at (866) 605-7437, and ask to talk to a benefits planner. If you’ve worked with us before, you may also directly email the benefits planner you’ve worked with in the past.

Q: WHAT INFORMATION DOES KRAUSE FINANCIAL SERVICES NEED TO OBTAIN A QUOTE?

A: We require the client’s financial information (income, cost of care, assets), as well as their state of residence and date of birth. On a case-by-case basis, we may require additional information to provide a more appropriate proposal for your client. You may also complete an intake form to verify you are providing the correct information.

Q: WILL YOU ASSIST ME IN DETERMINING THE MOST BENEFICIAL ANNUITY INVESTMENT AMOUNT AND TERM?

A: We can provide as much assistance as needed. If you already know the annuity investment amount and term you are seeking, our benefits planners can quickly provide you a quote and the necessary application paperwork. If you would like a recommendation regarding the annuity investment amount and term, our Benefits planners are able to provide comprehensive annuity proposals tailored to your client’s situation. All comprehensive proposals are complimentary with no obligation to proceed.

Q: WHAT IS THE BEST ANNUITY TERM FOR MY CLIENT?

A: Our benefits planners can make a recommendation on a case-by-case basis – contact us with questions.

Q: HOW QUICKLY WILL I GET THE PROPOSAL BACK?

A: Timing is everything. Upon receipt of all the necessary client information, we will return your annuity quote or comprehensive proposal within one business day. In many cases, our benefits planners provide same-day service. If we receive your request for a quote or a proposal, and we need some additional information prior to proceeding, we will contact you as soon as possible with any additional information we may require.

Q: HOW LONG DOES IT TAKE TO RECEIVE THE POLICY?

A: Once our office receives the application and funds, we typically receive the policy within 5-7 business days. Once we receive it, a copy is faxed to your office immediately, and the originals will follow in the mail. This time-frame varies based on the insurance carrier and the method of funding the annuity.

Q: DOES THE STATE MEDICAID AGENCY NEED TO BE LISTED AS PRIMARY BENEFICIARY ON THE ANNUITY?

A: In most cases: Yes, the State must be listed as primary beneficiary on the annuity. Exceptions may apply. Please contact a benefits planner for details on your specific case.

Q: MY CLIENT IS READY TO PROCEED WITH AN ANNUITY PURCHASE – WHAT IS THE NEXT STEP?

A: If your client is ready to proceed with the annuity purchase, please mail the annuity application documents containing original signatures, as well as the necessary funds, to our office for processing. Please contact one of our benefits planners for the necessary paperwork and instructions.

Q: DOES YOUR OFFICE ISSUE THE CONTRACT?

A: No, we are the agent of record for the annuity purchase (unless another insurance agent is directly involved). The insurance carrier issues the contract.

Q: HOW LONG DOES IT TAKE TO RECEIVE THE POLICY?

A: Once our office receives the application and funds, the insurance carrier will issue the policy the next business day. Once we receive the policy contract, a copy is faxed to your office immediately, and the originals will follow in the mail. You will typically receive it within 5-7 business days. This time-frame varies based on the insurance carrier and the method of funding the annuity.

ANNUITY APPLICATION Q&A’S

Q: DO I NEED TO WORK WITH A LOCAL INSURANCE AGENT TO PURCHASE THE ANNUITY?

A: No. A third party insurance agent is not required to be part of the transaction when purchasing a product through us.

Q: HOW MANY INSURANCE CARRIERS DO YOU WORK WITH? CAN MY CLIENT CHOOSE THE INSURANCE CARRIER THEY PURCHASE THE ANNUITY FROM?

A: We work with multiple insurance carriers. The insurance carrier options available to your client are dependent upon the state in which your client resides and the term and premium amount you are seeking. We always strive to provide quotes based on the insurance carrier best suited to your client’s needs.

Q: ARE THERE DIFFERENT ANNUITY APPLICATIONS OR CAN I ALWAYS USE THE SAME ONE?

A: Some insurance carriers have separate applications that are dependent upon the term and premium. Additionally, each insurance carrier may update their required application documents at any time. To verify that you are utilizing the appropriate documents, we always recommend contacting a benefits planner prior to submitting an annuity application.

Q: DO YOU NEED THE ORIGINAL APPLICATION DOCUMENTS OR WILL A COPY SUFFICE?

A: The insurance carriers we work with require application documents that contain original signatures, so the original application is always required. Therefore, the documents signed by your client must be mailed to our office using UPS, FedEx, or USPS. Most clients choose to overnight the documents to expedite the process.

Q: WHAT IF MY CLIENT MAKES A MISTAKE ON THE ANNUITY APPLICATION?

A: Your client may either re-complete the page, or your client may strike out the incorrect text, input the correct information, and initial the change. Please do not use white-out or correction fluid to “fix” any mistakes. When in doubt, please to send a copy of the mistake to any of our benefits planners for specific guidance.

Q: THERE ARE SEVERAL SPOTS ON THE APPLICATION FOR AN AGENT OR WITNESS – WHAT SHOULD I DO HERE?

A: Unless you are a licensed insurance agent appointed with the insurance carrier from which your client is purchasing the annuity, please leave all “agent” or “witness” lines blank.

Q: SHOULD MY CLIENT USE A PERSONAL CHECK OR A CASHIER’S CHECK TO FUND THE ANNUITY?

A: Both are acceptable; however, we strongly recommend using a cashier’s check to fund the annuity purchase. This ensures the funds are immediately drawn from the client’s account, which is important when purchasing the annuity at the end of the month. When using a personal check, we cannot guarantee when the check will be deposited and the funds drawn from the account. In most cases, your client also has the option of wiring the funds.

Q: CAN I CHOOSE THE “EFFECTIVE DATE” AND “FIRST PAYMENT DATE”?

A: We can often accommodate specific “effective” and “first payment” dates; however, we can never guarantee it. If the requested dates are earlier than the date we receive the application, we are sometimes charged an additional back-dating fee from the insurance carrier. In other cases, we are restricted by the insurance carrier’s policies and cannot back-date policies at all. To be conservative, we always recommend getting the application documents to us before your desired “effective” and “first payment” dates. Please call into our office for specifics on your case.

Q: WHAT IS THE LAST DAY OF THE MONTH YOU NEED TO RECEIVE THE ANNUITY APPLICATION?

A: We typically need to receive the application and funds no later than the second-to-last business day of the month. If you are using a carrier other than ELCO or Croatian, please contact a planner for further information, since the time-frame may differ.

CRISIS MEDICAID PLANNING FAQS

Q: DOES KRAUSE FINANCIAL SERVICES WORK WITH THE CLIENT DIRECTLY TO COMPLETE THE PURCHASE?

A: While we are happy to assist your clients with any questions they may have regarding the annuity purchase, the elder law attorney is our preferred point of contact. In that Krause Financial Services does not practice law in each state, we are unable to provide advice regarding Medicaid eligibility to clients and their family members.

Q: CAN I CHOOSE THE EFFECTIVE AND FIRST PAYMENT DATES?

A: In many cases, yes, we can accommodate specific effective and first payment dates, however we can never guarantee it. In some cases, if the requested dates are earlier than the date KFS receives the application, we are charged an additional “backdating” fee from the insurance company. In other cases, we are restricted by the insurance company’s policies and unable to backdate at all. To be conservative, we always recommend getting the application documents to us before your desired effective and first payments dates.

Q: DOES KFS ACTUALLY ISSUE THE CONTRACT?

A: No. Krause Financial Services is the agent of record for the annuity purchase (unless another insurance agent is directly involved). Upon our receipt of the documents, we review the application to ensure it is in good order and it meets all the necessary requirements for each state’s Medicaid program. We then overnight ship the documents to the respective insurance company for issuance.

Q: HOW LONG DOES IT TAKE TO RECEIVE THE CONTRACT BACK?

A: There is no guaranteed turnaround time to receive the contract back from the insurance company, however it is typically received within 5-7 business days. This could vary based on the insurance company being used, as well as the method of funding the annuity. Upon our receipt of the contract, a copy is faxed to your office immediately, and the originals follow in the mail.

Q: I RECEIVED MY CLIENT’S CONTRACT. WHAT IS THE DELIVERY RECEIPT?

A: Each contract will come to you with a cover letter from our office describing the Delivery Receipt. This is a document that must be signed by your client confirming they have received the policy. The Delivery Receipt must be returned to KFS for processing in order for payments to commence or continue. We only require a copy of this form, so you may send it to us in whichever manner you prefer.

QUESTIONS ABOUT ANNUITIES

Q: WHAT IS A MEDICAID COMPLIANT ANNUITY (MCA)?

A: A MCA is a spend-down tool utilized by elder law attorneys to help their clients qualify for Medicaid benefits. From a technical standpoint, a MCA is a Single Premium Immediate Annuity (SPIA) with added restrictions to meet the requirements of the Deficit Reduction Act of 2005. The SPIA is irrevocable, non-assignable, provides equal monthly payments, and contains zero cash value. Additionally, the SPIA must be structured to be “actuarially sound” in accordance with each state’s Medicaid manual, and must name the State Medicaid agency as primary remainder beneficiary (in most cases). Visit our “Medicaid Compliant Annuity” page for more details and case study examples.

Q: WHAT IS A VA ANNUITY?

A: A VA annuity is a spend-down tool utilized by elder law attorneys to help their clients qualify for VA benefits. From a technical standpoint, a VA annuity is a Single Premium Immediate Annuity (SPIA) that is assignable and revocable but with zero cash value. This makes a VA annuity more flexible than a Medicaid Compliant Annuity (MCA), but we structure VA annuities so that they can be easily converted into MCAs as your client’s needs change. Visit our “VA Annuity” page for more details and a case study example.

Q: WHO OWNS THE ANNUITY? TO WHOM IS THE ANNUITY PAYABLE?

A: The parties of an annuity contract vary depending on the case facts. In most married couple cases, the community spouse is owner and payee. In single person cases, the applicant for Medicaid is both the owner and payee. Payments are not made in the name of the nursing home or in the name of a client’s Miller Trust. In most cases, the only time the owner and payee of contract are different individuals is when utilizing the “Name on the Check Rule.” This is where an institutionalized spouse names his or her community spouse as the recipient of the annuity funded with IRA funds.

Q: WHAT IS THE MINIMUM PREMIUM AMOUNT TO FUND A MEDICAID COMPLIANT ANNUITY?

A: We can offer a minimum premium amount of $5,000 in most states. Please talk to a benefits planner for details.

Q: WHAT IS THE MINIMUM TERM LENGTH FOR A MEDICAID COMPLIANT ANNUITY?

A: We can offer a minimum term length of two months in most states. Please talk to a benefits planner for details.

Q: WHAT HAPPENS WHEN THE OWNER OF THE ANNUITY PREDECEASES THE TERM?

A: If the owner predeceases the term of the annuity, the named beneficiary will receive the remaining amount in the annuity. If the state Medicaid agency is the primary beneficiary, it will be entitled to recover funds up to the amount expended on behalf of the institutionalized individual. Any remaining benefits will be distributed to the contingent beneficiary. Different insurance carriers have different beneficiary payment options, so please contact a benefits planner for further information on a specific case.

Q: WHAT HAPPENS IF THE OWNER OF THE ANNUITY OUTLIVES THE TERM?

A: An annuity will make a fixed number of payments, which end at the completion of the annuity term. If the owner outlives the term of the annuity, the annuity contract will automatically terminate.

Q: IS MY CLIENT ABLE TO ROLLOVER HIS OR HER RETIREMENT ACCOUNT (IRA) INTO A MEDICAID COMPLIANT ANNUITY (MCA)?

A: In certain situations: Yes, your client can rollover or transfer his or her IRA into a MCA. The IRA cannot be annuitized and it must contain a cash value. To verify your client’s IRA qualifies for this option, or if the rollover/transfer is appropriate for your client, please contact a benefits planner.

Q: IS MY CLIENT ABLE TO CONVERT AN EXISTING ANNUITY INTO A MEDICAID COMPLIANT ANNUITY?

A: In certain situations: Yes, the client can request a 1035 Exchange to have the annuity transferred into a new contract. The annuity must be a deferred or variable annuity in order to perform the 1035 Exchange; it cannot be an Immediate Annuity. Your client may also be able to conduct a 1035 Exchange to transfer the cash value of an existing life insurance policy to a MCA. To verify that your client’s policy qualifies for this option, please contact a benefits planner.

Q: MY STATE ALLOWS PROMISSORY NOTES. WHY USE A MEDICAID COMPLIANT ANNUITY (MCA), INSTEAD?

A: If your client has cash assets, it makes more sense to use a MCA because it will be controlled by the insurance carrier rather than a family member. This would place less responsibility and stress on the family member as the insurance carrier guarantees that monthly payments distribute as scheduled. Promissory notes can also be problematic if the family member designated undergoes a disruptive event (e.g. death, bankruptcy, divorce). Finally a MCA requires much less long-term management by the elder law attorney than a promissory note.

Q: WHEN CAN THE STATE MAKE A CLAIM ON THE ANNUITY?

A: If the annuitant predeceases the term, the State is primary beneficiary up to the amount provided in Medicaid benefits on behalf of the institutionalized individual.

Q: DOES THE STATE NEED BE LISTED AS PRIMARY BENEFICIARY ON THE ANNUITY?

A: In most cases: Yes, the State must be listed as primary beneficiary on the annuity. Exceptions may apply in the case of a Community Spouse, minor child, or disabled child. Please contact a benefits planner for details on your specific case.

Q: WHAT ARE THE FEES ASSOCIATED WITH PURCHASING A MEDICAID COMPLIANT ANNUITY FROM YOU?

A: We never charge a fee when it is not necessary; therefore, all planning and case advising is complimentary. A processing fee may apply when a client decides to proceed with the annuity purchase. The processing fee due varies depending on the term length and premium amount of the purchased annuity. See this chart for a full breakdown of annuity fees. Many of our other products do not require a fee at all – this includes single premium whole life insurance policies, funeral expense trusts, and tax-deferred annuities.

Q: ARE YOU ABLE TO ASSIST WITH EXISTING, NON-COMPLIANT ANNUITIES?

A: Yes. If your client owns an existing annuity that is not Medicaid-compliant, we are happy to review the contract to determine the best course of action. In many cases, we can assist in selling the non-compliant annuity on the secondary market.

DEATH CLAIMS Q&A’S

Q: MY CLIENT DIED BEFORE THE ANNUITY TERM ENDED AND THE STATE WAS NAMED AS THE PRIMARY BENEFICIARY. WHAT HAPPENS NOW?

A: We can handle the death claims process for your office. First, we notify the insurance carrier of the death. They require a death certificate to begin the claims process. The insurance carrier will notify the State of its interest in the MCA and a claim package is sent to the State and the contingent beneficiary. It is next up to the State to send a reimbursement or release letter to the insurance carrier. Once received, the insurance carrier will settle the State’s claim, accept the release, and distribute the MCA balance (if any) to the contingent beneficiaries.

It is our goal to make this process as simple and streamlined as possible. We take pride in being a national leader and trusted resource for elder law attorneys. If you have any other questions not addressed in this post, please enter them in the form below. We’ll be more than happy to help you navigate any landmines that come with Medicaid and Veterans Benefit planning.