How do you get people to sit up and take notice? Talk taxes. Tell them you have a way to help them reduce their state and federal tax bill.
A Long-Term Care Insurance (LTCi) policy has the potential to help people lower the amount they pay in taxes.
And at the same time, LTCi provides valuable insurance coverage that can help them remain in their home, protect their retirement nest egg and ensure they won’t have to rely on their kids to take care of them.
Each year, the federal government sets guidelines for tax deductibility. Individual policyholders may be able to deduct a portion of the premium paid for a tax-qualified LTCi policy. This is called eligible premium.
Business owners who use business dollars to purchase LTCi can also experience significant tax savings based on the tax structure of the business:
Benefits received under a tax-qualified LTCi policy are intended to be tax-free as long as they do not exceed the greater of actual qualified LTC daily expenses or the IRS’ per day limitation.
Generally any LTC expenses the policyholder pays out-of-pocket may be claimed as a medical deduction on a federal income tax return. The only exception is payment for home care provided by a family member who is not a licensed health care professional.
Currently a number of states offer tax deductions and/or credits for people who purchase qualified LTC Insurance policies. And these state deductions and credits are in addition to those offered by the federal government.
Everyone is looking for ways to save, which is why now is a good time to talk to prospective clients about the tax advantages of purchasing LTCi. They’re sure to be more receptive when they learn that purchasing the coverage they know they need also can help them reduce their tax bill.
For more information, contact your LTC Specialist today.