What to do when a OneAmerica Financial account holder dies

No. OneAmerica states it plainly on its own Asset Care page: "Any LTC benefits paid will reduce the cash value and death benefit of the policy." Asset Care and Annuity Care are asset-based long-term care products issued by The State Life Insurance Company — the same pot of money pays for care while the insured is alive and pays the beneficiary after death. Every dollar drawn for qualifying long-term care comes out of the death benefit. So a policy with a $300,000 face amount that funded two years of care pays the beneficiary the reduced remainder, not $300,000. For Annuity Care the death benefit is the remaining annuity account value, not the original single premium. Before you plan around a number, call the Long-Term Care Claims Department at 800-352-6608 (Monday-Friday 8:00 AM - 5:00 PM ET) with the policy number and ask for the CURRENT death benefit. Policy loans on any permanent OneAmerica policy reduce the death benefit the same way.

The Benefit Plus Account (BPA) is a retained-asset account, and it is the default. Per OneAmerica's own Benefit Plus Account fact sheet: if a settled claim produces proceeds of $50,000 or more and the beneficiary does not opt out ON THE CLAIM FORM, the funds are distributed through a BPA — you get a booklet of drafts rather than a check. The money is reachable (you can write a single draft for the full proceeds plus interest), but the fact sheet is explicit that the funds sit in the insurance company's general account, are NOT FDIC insured, carry only limited state guaranty-association protection, and earn interest at a rate OneAmerica sets with a minimum of zero percent. If nine months pass with no contact, an inactivity notice goes out; three months later a second notice; after that the account is closed and the treasury department of your last known state of residence is notified — the money escheats. Decide before you sign: if you want the proceeds paid out as a lump sum to your own bank, elect that on the claim form. Questions go to the Individual Claims Department at 800-833-5569.

No — and doing it can cost you the tax deferral. A OneAmerica life insurance policy (term, whole life, or VUL, all issued by American United Life) can be owned by an irrevocable life insurance trust so the death benefit sits outside the insured's taxable estate; if you transfer an existing policy in, the IRC Section 2035 three-year lookback applies, so a death within three years pulls the proceeds back into the estate. An ANNUITY is different. Under IRC Section 72(u), a deferred annuity contract owned by a non-natural person — which a trust generally is — loses its tax deferral, and the inside build-up becomes currently taxable. That covers the fixed annuity, the fixed indexed annuity, and Annuity Care. The correct move is to name the trust as the annuity's BENEFICIARY and leave ownership with the individual. To name a trust as beneficiary, use the Policy Service Request at https://www.oneamerica.com/policy-service-request, or call the policy-service line for your policy prefix (800-437-4692 for "10"/"0", 800-428-2316 for "5"/"L", 800-537-6442 otherwise). For an ownership transfer to an ILIT, the online request will not do it — call and ask for the ownership transfer paperwork. Neither OneAmerica nor its representatives give tax or legal advice; confirm the structure with an estate attorney.

Group life through an employer cannot be assigned to an irrevocable life insurance trust the way an individual policy can — the trust can only be a NAMED BENEFICIARY, on form G-13117, "Beneficiary Designation Under Group Life Insurance Policy" (https://www.employeebenefits.aul.com/wps/wcm/connect/74d7f760-6e87-4b99-b984-ff595446548a/G-13117.pdf?MOD=AJPERES). Three things on that form catch people out. First, it must be signed by a WITNESS who has no interest in the policy and is not a named beneficiary. Second, if you live in a community property state — the form itself lists AZ, CA, ID, LA, NM, NV, TX, WA and WI — your spouse must sign the consent block when they are not the primary beneficiary. Third, the form states that a collateral assignee (a bank or finance company), the employer, and a funeral home are all UNACCEPTABLE beneficiaries. Name the trust by its full name and the date of the trust agreement; OneAmerica's own sample wording is "John Doe Trust dated ______ . Payment to trustee shall discharge the company." Mail the form to AUL, One American Square, P.O. Box 6123, Indianapolis, IN 46206-6123, or fax it to 888-285-1565, and coordinate with your employer's HR team (800-553-5318). If a trust named as beneficiary has been revoked or never came into existence, the proceeds go to the next class of beneficiary or to your estate — which is how a death benefit ends up in probate.