Group LTC Benefits Blog

Tax Advantages of Long-Term Care Insurance

 

 

7702B, 162, 213, 106 and Treasury Regulation 1.105-5*

Do these numbers mean anything to you?
If you’re working with business owners…they should!

LTC Insurance enjoys unique and preferential tax treatment for business owners that include:

  • Deducting LTCI premium
  • Offering coverage to key or select employees (carve-out)

And the policy benefits are income tax-free!

Additionally, W2 employees can use HSA dollars to pay for LTC Insurance.

Thanks to HIPAA legislation in 1996, the IRS created uniform policy standards and defined LTCI plans that meet certain requirements to be Tax-Qualified (TQ). Almost 100% of current Standalone LTC Insurance plans sold are Tax-Qualified and many riders on Life Insurance plans are considered Tax-Qualified too (which means business owners may be able to deduct the TQ rider portion of Life Insurance policies).

When working with a business owner, make sure you discuss these unique advantages of TQ LTC Insurance.

*IRS Code Sections

 

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Topics: Group LTCI,, Employee Benefits, Multi-life

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