An annuity gives the right to receive fixed, periodic payments either for life or a term of years. The annuity instrument must be examined to determine the provisions and requirements of the annuity and whether the individual can access the principal.

Annuities purchased prior to February 1, 2005

• If it is determined that the individual has access to any of the principal, it is treated as a revocable trust (OAC 317:35-5-41.6(a)(5)(C)(i)).
• If none of the principal is available, it is treated as an irrevocable trust.
• If the annuity provides for payments to be made to the individual, the payments are considered as income.
• Any portion of the principal that could be paid to or on behalf of the individual is treated as a countable resource.

Annuities purchased after January 31, 2005

• An annuity is presumed to be an available resource to the individual who will receive the payments because the annuity can be sold.
• The value of the annuity is the total of all remaining payments, discounted by the Applicable Federal Rate set by the IRS for the valuation of annuities for the month of application or review.
• The applicant may rebut the presumption that the annuity can be sold by showing compelling evidence to the contrary, in which case the annuity is not considered available.
• The applicant may also rebut the presumed annuity value by showing compelling evidence that the actual value of the annuity is less that the presumed value.

For an individual who has purchased an annuity on or after February 8, 2006, and is applying for long-term care services, see OAC 317:35-5-41.8(c).