When it comes to long-term care insurance, there are a lot of advantages: A long-term care policy makes funds available to help people get the care they need. It can help preserve a retirement nest egg. And it allows people to maintain their independence and protect their plans for the future.
But did you know long-term care insurance also offers significant tax advantages? It’s tax season, and this is a great way to begin conversation with small-business owners.
Premiums may be tax-deductible
Using business dollars to purchase a long-term care policy has the potential to save the business considerable amount of money. Under current tax laws, all or a portion of the premium paid on tax-qualified long-term care insurance policy may be deductible. The amount that can be deducted is based on the tax structure of the business.
Policy benefits may be tax-free
In addition to being able to deduct long-term care premium, there’s no tax on policy benefits the business owner receives. That’s because benefits paid by tax-qualified long-term care insurance policy are intended to be tax-free as long as they don’t exceed the greater of qualified long-term care daily expenses or the per-day limitation.
How this works to your advantage
Small-business owners always are looking for ways to save on taxes. So approaching them with a tax-saving idea is sure to get their attention. Not only can you help your small-business clients get essential long-term care insurance protection, you also can help them save more of their hard-earned business dollars. And once you’ve got them interested in long-term care policies for themselves, you’ve fot a perfect opening for multi-life sales.
Note: This information is not intended to be tax advice. Encourage your clients to consult a tax advisor to determine the tax benefits for the business.