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November 09, 2007
Guardian Urges Small Business Owners to Consider Long Term Care Insurance
NEW YORK, November 9, 2007 — In recognition of Long Term Care Awareness Week, November 4-10, The Guardian Life Insurance Company of America (Guardian) is encouraging small-business owners to include long term care insurance in their financial planning.
"All Americans, whether they own a business or not, should prepare for the possibility of someday needing long-term care," stated Cynthia M. Allen, CLTC, CSA, National Sales Manager, Long Term Care Insurance, at Berkshire Life Insurance Company of America (Berkshire), a Guardian wholly owned stock subsidiary.
"But business owners in particular have some very compelling reasons to consider having long term care insurance in place —for themselves, their key employees or even the entire workforce."
Financial Benefits for Business Owners and Their Employees
Certainly, providing long term care insurance to employees — either on an employer-paid or voluntary (employee-paid) basis — can help a small business enhance productivity and retain staff.
But business owners may not be aware of the tax advantages and other financial benefits they can realize by offering this particular type of coverage:
 | Businesses are able to deduct the full premium paid for long term care insurance coverage on behalf of its employees and their spouses or dependents. This includes shareholder-employees of C Corporations. |
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| Owners of LLCs, sole proprietorships, partnerships or those with more than two percent ownership of an S Corporate also enjoy significant tax benefits on company-paid premiums for their own policies. |
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| Many long term care insurance carriers offer a discounted premium rate for qualified businesses and associations. |
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| Some insurance carriers even offer premium payment options that enable business owners to have their premiums fully paid by the time they retire. |
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At the same time, employees can derive certain tax advantages by having long term care insurance in place — whether their employer fully funds the coverage1, pays part of the premiums or simply makes it available to them:
| Employees generally pay no income tax on employer contributions; |
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| Employee contributions can be made through payroll deduction or billed directly; and |
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| Benefits are generally tax-free, even for employer-paid policies. |
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And the popularity of employer-provided long term care insurance benefits is growing. According to an article published by the U.S. Department of Labor's Bureau of Labor Statistics2, 13 percent of full-time employees in all private industry were offered such coverage by 2003, while 19 percent of full-time employees in private establishments of 100 or more had access to this benefit.
Odds, Cost Both Too High to Ignore
Why does it make sense for companies and individuals to plan for long term care sooner rather than later? The chance that any individual will require long term care — defined as assistance with daily activities such as getting dressed, bathing, eating, moving from place to place and using the bathroom — is substantial. By age 65, people face at least a 40 percent lifetime chance3 of needing long term care.
The cost of this type of care is another compelling reason to plan for long term care funding before it's needed:
| Round-the-clock home care provided by a nurse can cost more than $300,000 a year.4 |
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| Medical and nursing home costs have been increasing annually far faster than the consumer price index.5 |
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"Owning and operating a small business takes enormous dedication and energy — qualities that could be significantly compromised by juggling the long-term care scenario of a loved one," said Berkshire's Allen.
"By putting a long term care insurance plan in place for themselves and possibly making it available to their employees, small business owners can help reduce the emotional burdens often associated with long term care decision making," she added.
Long Term Care Awareness Week was established by the American Association for Long Term Care Insurance (AALTCI). Seven members of Congress — three Democrats and four Republicans — introduced a bipartisan resolution supporting the week's goal of increasing Americans' awareness about the need to protect their financial and retirement security by planning for their potential long-term care needs.
About Guardian
Founded in 1860, The Guardian Life Insurance Company of America, New York, NY (Guardian) is one of the largest mutual life insurance companies in the United States. As of December 31, 2006, Guardian and its subsidiaries had $39.5 billion in assets (on a consolidated statutory basis). With more than 5,000 employees and 3,000 financial representatives, as well as more than 80 agencies nationwide, Guardian and its subsidiaries protect individuals, businesses, and their employees with life, disability, health, long-term care, and dental insurance products, and offer 401(k), annuities and other financial products and trust services. More information about Guardian can be obtained at: www.GuardianLife.com.
About Berkshire
Berkshire Life Insurance Company of America, Pittsfield, Mass. (Berkshire), is a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, N.Y. Its key missions are to grow Guardian's disability income and long-term care lines of business and to research and develop new insurance products. More information about Berkshire can be obtained at www.BerkshireLife.com.
About AALTCI
Based in Westlake Village, Calif., the American Association for Long Term Care Insurance (AALTCI) was founded in 1998 to promote the importance of planning for long-term care needs. Its goals are create heightened awareness among consumers for the needs and benefits of owning individual and employer-sponsored LTCI; provide information, training and tools to agents, brokers, financial professionals and insurers; and support industry certification programs. More information about AALTCI can be obtained at www.AALTCI.org.
This publication is offered for the purpose of education and information only and is not intended to constitute tax or legal advice. For information on your specific situation, please consult your personal tax or legal advisor.
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