What We Do
Employers & Employee Benefits Advisors
Financial Advisors, CPAs, P&C Agents & Elder Law Attorneys
Our Planning Process Working With Other Professional’s Clients
Protecting Our Assets
Role Long Term Care Plays in a Financial Plan
Do you have a policy that you purchased two years ago or maybe 20 years ago and don’t remember exactly what you purchased? Or maybe you don’t understand what a certain ‘term’ means. Contact us and we can assist you. We are educators. We want people to understand what they have purchased whether or not you worked with us in determining your needs.
Did you know that business owners can deduct the cost of Long Term Care Insurance protection for themselves, their spouses and sometimes even their parents on a favorable basis? You are using pre-tax corporate dollars to pay for your post-retirement asset protection. Plus, this can be a valuable benefit to offer to selected key employees.
It costs no more to work with an experienced long term care professional. We can work with you and/or your insurance broker to help you get the coverage that's best suited for you and your business.
Individuals who own businesses or derive self-employment income should consider the significant tax advantages of purchasing Long Term Care Insurance protection through the business as a business expense. In addition, Long Term Care Insurance premiums may be paid from a Health Savings Account (HSA) up to the Federal annual limits allowed.
You may qualify for "preferred rates" that Long Term Care Insurance companies offer to individuals who are currently in good health. You'll save money because costs for Long Term Care Insurance increase each year if you wait to buy when you're older. And, perhaps most important, 24 hours from now a change in your health could make it impossible to qualify for preferred Long Term Care Insurance protection...at any price.
Employees (non-owners) are not taxed on premiums for tax-qualified policies paid for by employers. Employers do not pay payroll taxes on amounts paid for Long Term Care Insurance premiums. Benefits paid under a tax-qualified reimbursement policy are received income tax free by the individual.
Business owners can offer Long Term Care Insurance coverage to whomever they choose without risking the loss of deductibility for themselves. It is possible to create a bona fide class of select corporate employees that are eligible for this corporate-paid benefit (IRC Sec. 105/106 Medical Reimbursement Plan). Premium payments generally will be tax deductible when the class is based on such factors as officers of the corporation and length of service. Tax rulings have stipulated that the class cannot, however, be based on stock ownership. Consult a tax advisor for details. Here is how it works for a Hybrid policy:
How it Works
- Business pays a premium to the Insurance Company.
- The Insurance Company applies this premium to a LTC Insurance policy owned by the insured. This policy insures the life of the C corporation owner or employee.
- The premium associated with the life insurance base policy would be considered taxable income to the employee. The LTC premiums are considered tax-free.
Preserve your post-retirement savings and assets using pre-tax corporate dollars. Ensure you have choice and control when you need it most. Recognizing that government can't pay the bill for Long Term Care, federal and a growing number of state tax codes now offer tax incentives to encourage Americans to take personal responsibility for their future long-term care needs by utilizing Long Term Care Insurance.
Please note that we do not offer tax planning or legal advise. We recommend a conversation with your tax planning professional to make these decisions.
To help you understand your situation we have a comprehensive guide by State available on this site.
Click on the button below to view the 2019 Federal & State Tax Guide.
How we assist other professionals
Long Term Care is a complex field. We are able to work with other professionals to assist in enhancing their business without allowing another professional to enter the picture.
Financial Advisors are usually most knowledgeable in investments, life insurance, or financial planning. Long Term Care is not generally an area where they have a proficient knowledge base. That is where we come in. We can work with you to assist in providing the kind of experience that your clients are comfortable receiving from you. We can adjust the manner in which we work with your clients based on how you believe we should work with them.
CPAs are always looking for ways that their business clients can save money on taxes. We represent a field that provides an important benefit that your clients should be consider ing and that they can deduct the expense on their taxes.
P&C Agents work with their clients primarily with their property & casualty needs and sometimes offer life insurance and disability insurance. You should consider working with our organization to provide long term care education and awareness.
Elder Law/Estate Planning Attorneys deal with mature clients who may be involved in estate planning as well as other “age related” items, one of which includes long term care planning. Let us work with you to provide education and awareness as well as to provide the policy that will fit your client’s circumstances.
Why Other Professionals Refer to Us
A large portion of our business is derived from referrals by - financial advisors, attorneys, tax advisors, and existing clients. We value these relationships and the trust in the work that we do and the services we offer.
We promise to make your client feel comfortable.
We will thoroughly explore your client’s circumstances as they relate to suitability for long term care insurance including medical underwriting issues.
We promise that your clients will be fully informed about planning for long term care and what their options are. They will be confident that they have all the information they need for an informed choice.
Because we are an independent brokerage, we will tailor a plan to meet your clients’ specific needs and choose the best carrier to meet those needs.
Active involvement in professional organizations along with frequent speaking and training opportunities require us to keep up to date on changes in the industry and new products that may meet the needs of your client.
If long term care insurance is not appropriate for medical reasons, we can recommend alternate vehicles that will still help to protect assets if care is needed. We will seek your input on those recommendations.
We will work closely with you in making these recommendations and keep you informed at each step.
We promise that your clients will appreciate that you referred them to us.
We promise that your clients will be even more confident in your ability to guide them financially as a result of your referral.
Our Planning Process
Working With Other Professional’s Clients
Step 1: The Client Concerns and Preferences Discussion
Each person seeking information on long term care planning comes with their own questions and concerns. The goal is to meet their needs and respond to their concerns. In this part of the planning conversation we spend time talking about the types of care that are available. Many of our prospects do not realize that most long term care is provided in the individual’s own home. Ask if they’ve had an experience with a loved one needing care. If they themselves were to need care, what would they want the experience to be like? Geographically where do they think they would likely be? Where would they prefer to receive care—at home or in a facility? How do they feel about having their family members involved? What are their thoughts and concerns about the impact of care giving on their loved ones?
Step 2: The Resource Inventory
Each prospect also has different resources available. We will discuss the resources that they have available, how they are currently allocated or invested and what they would be willing and able to contribute towards their care without impacting the lifestyle of others who may be dependent upon those resources. Also discuss the availability of family or friends who may be involved in providing or helping to finance care. Discuss how available they believe those people may be in the future.
Step 3: The Funding Decision
If needed, how does your prospect plan to fund care? If needed, review what health insurance and Medicare will cover. If needed, discuss the criteria to qualify for Medicaid. Discuss the option of self-funding (including potential penalties and tax or estate planning issues that may arise) and review current local costs. This provides a lead into the discussion of partially self-funding and partially insuring to shift a portion of the risk. You may also review options such as life insurance or annuity policies that can be used to pay for care.
Step 4: Designing the Plan
In this final step, work together with your client to develop a reasonable plan in the event that they were to need care. Take into account the expressed concerns, care preferences and the resources that they have available. Discuss the options available to protect their family and their finances if care is needed. If long term care insurance is indicated, determine which insurance company’s health requirements, care options, and costs best fit the prospect’s needs and desires.
A lifetime! We learn about the world and our values as we grow from childhood through young adulthood. We establish a career, marry, raise a family, send the kids off to college, become empty nesters and then enter the aging population. During these years we have established a ‘lifestyle’.
A ‘lifestyle’ can be as different as apples and oranges. Maybe its golf, owning horses or a vacation home. Maybe its traveling, good food dining out with a nice glass or two of fine wine. Or, maybe it is educating grandchildren, or caring or funding for a special needs child. To a successful person, no income is “discretionary”.
Accumulate Portfolio Legacy
Today, most of us expect that we will live a long life. Let’s say that we live to our 80’s. Is it not possible to consider that at some point during our lifetime we may experience a health crisis that would require custodial care for a period of time, or that we could experience the dreaded ‘dementia’ event?
While we spend our working life accumulating a financial portfolio to provide for us during our retirement, we do take steps to protect that portfolio as well as our family health and income. The methods of protection that we use are listed in the chart below.
|Assets, Income & Family Portfolio||Protected By||Asset Protection Portfolio|
|Home (Asset)||Home Owners Insurance|
|Health (Family)||Health Insurance|
|Income (Income)||Disability Insurance|
|Family (Family)||Life Insurance|
|Wealth (Asset)||More Life Insurance|
(Assets, Income, Family)
|Long Term Care Insurance?|
Note, however, that we haven’t protected for the one condition that could destroy the assets that we have accumulated. What happens if you suddenly experience a long term care crisis! This can happen at any age – such a crisis is not experienced only by aging adults. It doesn’t matter what your age, income, religion or nationality. How will you handle such a situation? Do you have a plan? Is the plan funded? Will your adult children, or spouse become a ‘caretaker’ for you, or will they become a ‘manager’ of the care that you may need.
Why aren’t we protecting ourselves for this potential event that can disrupt our lifestyle from both a financial aspect as well as putting a burden on family relationships? Here are commonly asked questions that people ask.
1. Procrastination: I’m too young, I’ll consider purchasing a LTC insurance policy later. 2. My family will take care of me 3. Long term care insurance is too expensive 4. I’m never going to need care. 5. Medicare will take care of my needs 6. I can self-fund care if I need it.
You’ll find answers to all these questions here on this website. Let’s briefly review what is likely to happen if you don’t have a funded plan should you incur a long term care crisis. Listed below are the key consequences of not having a plan in place.
Providing care disrupts the emotional and physical well being of those the client loves.
- The situation can make healthy caregivers chronically ill.
- Rather than coming together, adult children may be torn apart, which may cause irreversible damages
Paying for care causes a reallocation of INCOME. If the situation lasts long enough, it compels an unintended invasion of your portfolio. This could cause additional issues such as:
- Paying additional penalty taxes for withdrawing funds from qualified plans plus the regular taxes that would be incurred in doing so.
- The market conditions might not be to your benefit if you have to withdraw funds from investments.
- How much of your Portfolio is liquid?
- The bottom line is that ASSETS don’t pay for care INCOME does!
Let’s take time to learn what defines Long Term Care and what we can do to protect our physical assets and family relationships. By doing so, you will be able to make an ‘informed decision’ regarding how you can best create and fund a plan to protect your loved ones in the event of a long term care crisis.