To encourage more Americans to plan for the potential risk of needing costly long-term care, the Federal government and a growing number of states now offer significant tax-saving incentives for the purchase of special tax-qualified long-term care insurance.

The cost of long-term care coverage could be fully tax-deductible, explains Vikram Udeshi, Financial Architect of Q Financial Group located in Needham, MA. Most individuals are unaware of this fact and the significant savings opportunity it provides and some of the exclusive benefits offered to the small business owner.

Legislation passed in 1996 created generous incentives for business owners to purchase long-term care insurance for themselves, spouses as well as their key executives. As a result, according to the American Association for Long-Term Care Insurance, some eight million Americans now own this protection with some 400,000 new policies issued last year.

The rules vary based on the type of business entity but in general, business owners can deduct 100 percent of insurance premium paid for employees. Owners can deduct up to 100 percent of their own premium. In addition, the law allows spouses to be insured under the company-plan, even if they are not employed. Most insurers today offer significant discounts when both husband and wife are protected, explains Udeshi. When you factor in the tax savings applied to both policies, it's almost like getting two people covered for the cost of one.

Businesses that are established as C-Corporations benefit today from full deductibility for owners and spouses, notes Udeshi. The owner can offer tax-deductible long-term care insurance coverage to whomever they choose on a selective basis - even if that's merely the owner and his or her spouse, Udeshi adds. This is truly one of the last remaining tax-advantaged benefits available especially for owners.

In most states, insurers offer paid-up options that allow the business owner to have their protection fully paid for upon reaching age 65 or after a pre-determined time period, say 10 years. This is an important advantage available to a business owner who wants to have their coverage paid-up fully before they retire or sell the business, adds Udeshi. You're covered for life without having to write checks when you are retired.

For more information on tax-advantaged rules pertaining to individuals and business owners interested in long-term care insurance planning, contact Vikram Udeshi at Q Financial Group by calling 781-247-4603. Or, send an E-mail udeshi@qfinancialgrp.com.

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