Executive long-term care insurance is a type of business insurance coverage that is used by employers to reward specific executives. Under this plan, the employer will buy a long-term care insurance policy for each member in the executive group. Since executives are often key to the success of a business, some employers often use this type of coverage to attract and retain the talent they are looking for.
Tax Benefits of Executive Long-term Care Insurance
Through this unique type of business insurance, employers can now insure a select group of their workers for the long term. With the increasing costs of semi-private and private rooms in nursing homes, protection from such long-term care costs makes good financial sense for both employers and employees.
However, what most businesses don’t realize is that adding such a program into their general business insurance scheme might actually help their bottom line. Of course, the covered employees will also gain some advantages from this insurance coverage, including:
- It enables companies recruit and retain the talent they need as key executives.
- The insurance premiums can be deducted from taxable income (including equity owners).
- It empowers the covered employees retirement plan by providing them with a significant portion of their retirement savings.
- Group underwriting is less restrictive in comparison to individual plans.
- It provides a fully portable business insurance plan for the covered employees and/or their families.
The tax benefits of executive long-term care insurance are only the beginning. Essentially, long-term care refers to daily living support provided for an extended period of time, either at home or in a facility.
Additional Benefits of Executive Long-term Care Insurance
As part of this package, the insurance will help families by covering the cost of care received in a nursing home, in a community, or at home. In most cases, this is often the only option available which can enable employees to manage their lives in the aftermath of accidental injury or development of health complications.
Offering executive long-term care insurance is exceptionally beneficial without being too expensive. This is mostly on account of its favorable tax treatments. In fact, most businesses are now able to deduct 100% of their premium contributions for this type of business insurance. In short, this coverage will protect the retirement plans of those insured. It will make sure that the insured employees don’t have to pay out of pocket, which could deplete their resources and assets saved during their twilight years.
Executive Long-term Care Insurance for Attracting Top Talent
Executive compensation goes over and beyond the normal benefits which lure top talent into the executive pool of a company. Executives play a unique role within the larger corporate structure. Their job descriptions and responsibilities are usually more demanding than those of the average employee.
Similarly, the pressures exerted upon them in the line of duty are often much greater. When businesses fail to acknowledge this fact, they often lose the desired talent to other employers.
To counter this, businesses are now using executive long-term care insurance packages to attract and retain qualified executives. Just about anyone could eventually need long-term care at some point in their life. This is why so many companies in are now taking advantage of this type business insurance. Although it can be expensive, it also provides protection to individuals that play a vital role in businesses.
When hiring (or even long after a great employee has been hired), a firm might want to protect the long-term care interests for their top employees. This way, the employee will be highly unlikely to jump ship and leave for another position.
While meeting long-term care risks, there are two options available. One might want to get insurance to cover the cost of care once the event occurs. Alternatively, they might opt to manage the risk at the point when it occurs. Self insuring requires great sacrifice that most people are not willing to make.
This is another reason of why executive long-term care insurance is such an attractive option. It will ensure that the covered parties (and their families) will be able to maintain the lifestyle they are used to, even if the former executive gets injured or falls ill over the course of their lifetime.
In conclusion, executive long-term care insurance will provide funds to pay for health care and stays at community homes for the elderly, among other options. In effect, this business insurance coverage ensures that the insured party does not have to dig into their own pockets in-order to sustain their personal care after retirement, making them happier and more productive.
Contact the Business Benefits Group to Learn More!
Executive long-term care insurance is just one of the many insurance benefits we guide our clients through so their valued employees are taken care of. For more information on executive long-term care insurance or to learn about how BBG’s business insurance services can protect the best interests of your business – call us directly or contact us online to request more information.