Long Term Care Coverage as an Executive Benefit

We are living and working longer than the generations that came before, but the strength of Social Security and the retirement options afforded to our parents are not what they used to be. Retirement savings, which are mostly our own, have become more important than ever to maintain quality of life in our later years—and the largest potential risk to those hard-earned savings is the ever-looming cost burden of a long-term illness.

According to government estimates, about 60% of US citizens will need some form of long-term care (LTC) assistance at some point in their lives. The costs associated with LTC are expected to continue to grow. To compound the retirement savings problem, the American workforce is currently undergoing what many have dubbed, “The Great Resignation,” with talent retention and acquisition among companies having become what Forbes is calling “the new CEO obsession in the back half of 2021.”

Against this backdrop, offering executive benefits, like Long Term Care, that are not standard fare, may be one of the smartest and unique additional benefits used for attracting top talent. Traditional LTC coverage is often viewed as expensive, and as a result, many people choose not to buy it. However, if a company could foot the bill, obtain a deduction, and offer the non-taxable benefit to the executive—wouldn’t that be attractive?

For business owners and executive teams, 10-Pay Long Term Care Programs have become a popular and creative executive benefit. Specifically designed for businesses to provide key executives with portable LTC insurance policies, these limited ten-pay policies can act as a powerful benefit to attract top talent and protect retirement plans for executives and their spouses from potential healthcare costs.

Premiums for these 10-Pay LTC Programs are fully deductible for C-Corporations or for executives of S-Corps or partnerships who are not owners or greater than 2% partners. Premiums are also not considered taxable income for the executives, and if used, the benefits paid are also tax free—making these policies a triple tax-advantaged benefit.

These new LTC products, and other evolving solutions help tackle both the increasing costs of LTC and growing concerns around attracting top talent. We are here to consult with you on creative executive benefits like LTC insurance and other options to determine which are best suited for your organization. Please reach out to us to find out more.

Securities offered through Lion Street Financial, LLC (LSF), member FINRA/SIPC. Investment advisory services offered through Lion Street Advisors, LLC (LSA). LSF and LSA are not affiliated with Sapers & Wallack.

Variable life insurance is sold by prospectus. Please consider the investment objectives, risks, charges, expenses, and your need for death-benefit coverage carefully before investing. The prospectus, which contains this and other information about the variable life policy and the underlying investment options, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The investment return and principal value of the variable life policy are not guaranteed. Variable life sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the policy is surrendered. Contract surrender charges may also apply.

Contact us for further information about Long Term Care coverage.