Is it beneficial for Business Owners to consider Long Term Care Insurance?
There are a number of reasons business owners may find having long term care insurance as a benefit.
The premiums are deducted as a business expense.
The plans are available as employer paid, as a voluntary pay or a combination of both.
The business owner may elect to have a ten pay policy allowing the policy to be paid up at owner's retirement.
Having a program in place will assist the business in succession planning.
Group discounts are available for employees and their family.
Long term care insurance provides the availability for an executive carve out.
An Executive Carve Out plan can be used when a business decides to reward a specific group of executives by purchasing for each member in the group, a long-term care insurance policy. The executive or key employees are usually those who are key to the success of the business. By using an accelerated pay option such as a "ten pay," the business can project the cost of this special benefit and determine when the premium payments will stop. When the executive retires the business can present him or her with a paid up long-term care insurance policy.
Whether the policy is limited pay or a continuous pay long-term care insurance policy, there are many advantages to this plan:
. The Executive is the owner of the policy and it is portable.
. The business can deduct the cost of the premiums using pretax dollars, just like health insurance.
. The total premium paid by the business is not included in the executive's taxable income (unless the executive has an ownership interest in a pass-through business entity like a partnership, S corporation, LLC, etc.).
. Benefits under a tax-qualified long-term care insurance policy are paid to the executive tax free.
The discussion of legal and tax considerations in this article is an interpretation of current law and is not intended as legal or tax advice. Business owners should consult their legal and tax professionals.
By implementing a long term care insurance benefit for a small business the business owners are offering a tremendous employee benefit that has true value to employees.
The employee receives a policy at a discounted rate. He may receive simplified underwriting (allowing someone who may not be insured if full underwriting was in play). Premiums do count as a medical expense and may also be paid from an HSA account within limits.
It is important to note that having a long term care insurance policy through an employer it is an individual policy and therefore portable. This allows the employee to take the plan with her if she were to leave the employment of the company for any reason.
The benefits for business owners are:
Premiums paid are a business expense. Long term care insurance may be offered as a voluntary program only, employer contribution or anywhere in between. An executive carve out is available for key employees helping with recruitment, retention and reward.
Thank you and for more information on long term care insurance for business owners please contact
Author Resource:
Thank you and please visit Long Term Care Plan Design for additional information on Long Term Care Insurance for Business Owners
![[Valid RSS feed]](http://www.look4articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.look4articles.com/images/rss.jpg "XML Feed For RSS")