4 Ways LTC Insurance Provides Tax AdvantagesJulie Brooks
When discussing the benefit that a Long-Term Care (LTC) Insurance policy has on your client’s overall financial plan, taking the time to explain the tax advantages may provide the tipping point for clients who are hesitant about purchasing a policy.
Here are a few scenarios on how to approach each type of client:
The Client On The Fence
Many states offer a deduction or credit on paid LTC Insurance premiums, which can make purchasing coverage more attractive to your clients. For example, in the state of Ohio, residents are able to deduct the entire annual premium for their LTCI policies on their tax returns.
If you are working with clients on their tax strategy, consider turning their tax refund into an LTC Insurance premium payment. It’s a great way to plan for the cost of the insurance and can make annual premium payments a non-event.
When a C-Corporation purchases a policy on behalf of its employees, and their spouses or dependents, the corporation is entitled to take 100% deduction as a business expense on the total premiums paid. If self-employed, clients can deduct 100% of their out-of-pocket LTC premiums up to the age-based Eligible Premium amounts*.
Clients who already have an LTC Insurance policy may not know about the tax deductions available to them. So during your annual review, be sure to educate them about a missed opportunity to take a tax deduction.
Contact your Insurance Advisors Long-Term Care Specialist today to learn more about the tax advantages of LTC Insurance.