What is Group Long Term Care Insurance?

According to the Administration for Community Living there is an almost 70% likelihood someone turning 65 will need long-term care services, with women needing it ~1.5 years longer than men. 

With people living longer, there is an increasing trend in businesses offering these benefits to organizations and the best part, the business does not always have to pay for it! 

There are two main benefit categories:

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) included provisions for favorable tax treatment of qualified Long-Term Care insurance contracts.

LTC insurance can be a tax-advantaged way to reward your employees. Businesses can deduct the premiums they pay on behalf of employees, and employees do not have to pay taxes on their income.

However, there are limitations on the deductibility of the premiums when the business owner is also an employee of their own business.

Now that we have the Financial Gap Analysis created, we need to start working on the financial tactics. 

Depending on your financial risk tolerance will determine how aggressive or conservative we will be in setting up your plan. This will directly impact the tactics used as well as the investment funds available within the portfolio.

Group long term care insurance is an opportunity for individuals who may not normally be able to purchase an LTC insurance policy, to become eligible.

In addition, by operating as a group policy, it can greatly increase the speed of underwriting and accessibility to employees.

Employees can work directly with their organization, an already known and trusted entity with the insurance agency to gain an insurance policy.

Rather than having to identify which insurance advisor they should work with and starting the process over. By removing this step, it can increase the likelihood of an employee signing up for long term care.

By grouping employees together, it can leverage economies of scale, helping to reduce can premiums for individuals.

Considering a unisex rate structure, women typically benefit by a lower premium. Usually women have higher premiums because on average they live longer and require more care.

However, through the unisex rate structure, women can receive the added benefit of gender neutral premium rates, thus potentially paying less than they would individually.

In addition, the potential to offer group long term care insurance to your employees is becoming more accessible. Small businesses with as low as three employees are now able to participate in certain products.