How does using an annuity help with Medi-Cal planning?

An annuity is a fixed sum of money paid to an individual every year for a specific period of time. If your annuity is considered Medi-Cal compliant that means it qualifies as a special type of annuity that will not put your Medicaid eligibility at risk. In many cases, a Medi-Cal compliant annuity is known as a Single Premium Immediate Annuity (SPIA), which can be converted so that it pays out over the annuitant’s life expectancy. Great caution must be used when considering whether or not to use an annuity in Medi-Cal planning as there are unscrupulous annuity salespersons who may misrepresent the characteristics of an annuity just to make a sale.