# Senior Health Planning Account Act

This bill creates a new type of savings account specifically designed for older adults who sell their life insurance policies. Here's how it works: if you own a life insurance policy and decide to sell it to someone else (which people sometimes do to get cash), you can take the money you receive and put it into a special "senior health planning account" within 30 days. The key benefit is that you won't have to pay taxes on the profits you made from selling that insurance policy, as long as you contribute that money to this new account.

The money in these accounts would be used to pay for medical expenses—things like doctor visits, hospital bills, prescription medications, and other healthcare costs for you or your spouse. If you use the money for qualified medical expenses, you don't pay taxes on those withdrawals. However, if you take money out for other purposes, you'll have to pay income taxes on it plus an additional 20 percent penalty. The penalty doesn't apply if you're terminally ill, chronically ill, or have already passed away. This penalty structure is designed to encourage people to actually use the accounts for healthcare rather than treating them as general savings accounts.

The accounts would be managed by banks, insurance companies, or other approved trustees, and the money can't be invested in life insurance contracts themselves. If you die and leave the account to your spouse, they can continue using it as their own senior health planning account. If you leave it to someone else, that person would have to pay taxes on the full account value, though they could reduce that tax bill by paying any outstanding medical bills the deceased person owed before death.

Essentially, this bill offers a tax break to people who sell their life insurance policies, but only if they use the proceeds specifically for healthcare costs. It's aimed at helping seniors manage the healthcare expenses that often come with aging.

Senior Health Planning Account Act

Higgins, Brian

Senior Health Planning Account Act This bill allows tax-exempt senior health planning accounts that are funded using a taxpayer's gains from the sale or assignment of a life insurance contract. The bill excludes from gross income (1) the gains that are contributed to the accounts, and (2) distributions from the accounts that are used exclusively for the health care expenses of the account beneficiary or the account beneficiary's spouse.