Does your client own LTC Insurance or are they considering purchasing a plan? Then they need to know about the important tax advantages of long-term care insurance. A surprising number of policyholders have the ability to deduct premiums, and those insured also find that the amount of premium that can be deducted increases each year. A big reason is that more and more buyers of LTCI also own Health Savings Accounts and can pay premiums with pre-tax dollars.
It's important to understand that when we are talking about the tax-advantages, we are talking about "tax-qualified" LTC Insurance. Tax qualified LTC Insurance was codified by the IRS in 1996 as part of the original HIPAA legislation. Under section, 7702B, LTC plans that meet certain requirements are considered tax-qualified. Almost 100% of current standalone LTC Insurance sold are tax-qualified, and many riders on life insurance plans are tax-qualified as well.Read More