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Topic of the Month: September 2009
Single Premium LTCi Gives You a Competitive Advantage

Single premium is something you don't find from every long-term care company. Now available on individual* products in the Mutual Care® Plus portfolio, including Mutual Care 3 & 5 and Mutual Care My Way, this competitively priced option gives you an edge over the competition.

Business owners make good prospective clients
The tax advantages offered by a long-term care insurance appeal to business owners, who are always looking for a way to reduce their tax burden. The owners of C-corporations make excellent prospects for single premium because current tax laws allow C-corporations to deduct the full amount of long-term care premium paid for the owner/employee, spouse, dependents and a designated class of employees.

Here’s how it works:

Situation

Coverage
  • Owner of C-corporation, age 55
  • Wants to purchase $6,000 per month of LTCi coverage
  • The business will pay the premium
  • Mutual Care® Plus
  • $6,000 per month benefit
  • 90-day elimination period
  • 5-year benefit period
  • 100% home health care/assisted living
  • 5 percent compound lifetime inflation protection
  • Spouse allowance

Premium Options

Tax Advantages
  • Annual premium (lifetime)     $2,450
  • 10-pay premium                  $7,326
  • Single premiumnbsp;            $64,028
  • Single premium                  $64,028
  • Deductible to corporation       $64,028
  • Income to the owner             $0
  • Income tax on benefits          $0

Note: Single premium may be construed as a pre-paid medical expense under Code Section 213, and may not be fully deductible in the first year. Amortization over additional years may be required. Encourage your clients to consult a tax advisor.

*Single premium is not available on multi-life programs (Mutual Care at Work).