Advisors Blog

Tax Advantages for Business Long Term Care

Published on November 18, 2020



Tax Advantages for Business Long Term Care

There is a unique opportunity for C-Corps to offer LTC on a discretionary basis and receive significant tax deductions. The ideal case involves a closely-held business looking to benefit primarily the owners (and their spouses), or at most create a carve-out LTC plan for 20 or less executives or highly-compensated employees.  

Congress has created some very attractive tax incentives to C-Corps to provide LTC plans for their employees. For example, premiums paid by C-Corps are fully deductible. The premiums paid by a C-Corp for LTC are not recognized as taxable income by the employee, and LTC benefits are received tax-free. (See 2020 LTCi Tax Summary for more details). Corporate-funded LTC is a great way to reward and retain talented employees, and one that not many businesses are yet offering. Businesses that offer LTC to their employees can truly set themselves apart from their competitors with a best-in-class benefits package.

One carrier that offers a plan for this market is National Guardian Life (NGL). Their EssentialLTC plan is worksite-friendly and allows a business to sponsor and pay for the plan. They offer Unisex rates on multi-life plans, with multi-life discounts, and a streamlined application process. Their EssentialLTC product has all the flexibility and features one would look for in a robust LTC plan for owners and executives.

While this incredibly favorable tax treatment applies to other traditional LTC plans, NGL ups the ante by offering a single-pay option – creating an opportunity for a much larger tax deduction than available in a continuous pay LTC plan. The tax deduction can be further amplified by adding one of their optional ROP riders. A corporate-sponsored and paid LTC plan could particularly appeal to businesses at fiscal year-end who have retained earnings. Offering a LTC plan allows the corporation to deploy retained earnings and thereby reduce or eliminate any accumulated earnings tax they would otherwise be liable for paying. It’s truly a win-win for all involved.

If you would like more details, please contact us to discuss offering LTC for your business clients.




Our insurance specialists provide advisors with the resources and knowledge to proactively engage their clients. At your request, we can even work with your client directly. Long-term care isn’t an easy subject to broach, but we’ll help you start the conversation as well as guide you through the plans that are most appropriate for your clients. To get you started, use our GBS Long Term Care Questionnaire to help you start a case by collecting all the right information up front.




We thank you again for your business. For more information or

insurance quote requests, please contact your brokerage manager

or give us a call at (800) 473-5966.

For agent use only - not for use with the general public.

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Phone: (800) 473-5966


GBS Insurance and Financial Services, Inc. do not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

This guide is provided to you for information purposes only and should not be relied upon as legal or tax advice. Consult a tax advisor regarding specific circumstances. Please note that Premier Brokerage Services, A Gallagher Company, and its licensed representatives do not provide legal or tax advice. Consult an attorney or tax advisor.

© 2020 Arthur J. Gallagher & Co. 




Webinar Invitation: How to Position LTC as a Retirement Planning Tool

Join us for a special webinar featuring Mutual of Omaha discussing how agents can position LTC as a retirement planning tool. We will be going over today's LTC changing market with real world statistics, how to start the conversation, tax favorability and more.


GBS News: WA State LTC Update | DI Sales Opportunities | Fixed Index Annuity | and more

The soon-to-be-enacted "Long Term Services and Trust Act" will impose a .58% annual tax on Washington state's workforce to fund one year of future LTC benefits (non-portable and only available if still living in WA). The only way to "opt-out" and avoid paying this tax is to show proof of existing coverage.

While the Trust Act could be beneficial for low-to-middle income earners, it negatively impacts those highly compensated individuals who will pay a much larger, disproportionate amount for the same, minimal benefit.


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