Actuarially Sound Determination
Earlier in this module you learned that one of the steps for evaluating an annuity for a possible transfer involves determining whether an annuity is actuarially sound.
Definition: An annuity is actuarially sound if the cash value as of the date of annuitization is expected to pay out in full within the expected lifetime of the person requesting MA payment of LTC services or his or her spouse.This determination is needed to make sure the applicant and/or their spouse will receive a return of the money at least equal to the amount invested in the annuity. When the money returned is less than the money invested, the annuity is not actuarially sound and an uncompensated transfer has occurred.
This section provides information about the actuarially sound determination process. The process steps can be found on the handout, Actuarially Sound Determination (PDF).
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Transfer Evaluation - Actuarially Sound Determination