Now that 2021 is here, many people are starting to think about their taxes. If you have clients - either individuals or business owners - in need of additional 2020 tax-deductions, now is a great time to talk to them about Asset-Based Long -Term Care (ABLTC) solutions. 

The value of ABLTC has been well-established:

• Tax-Free LTC
• Tax-Free death benefit 
• Guaranteed premiums
• Guaranteed Liquidity

What isn’t as well understood is the tax-deductibility of a portion of the ABLTC premium, essentially giving clients a “discount” on their premium. Who doesn’t love a discount?!

Case Study 

• Mike | Age 55 | Nonsmoker
• Paying $10,000 annual premium for 20 years
• OneAmerica Asset Care, Lifetime Benefits, 3% compound inflation

Mike’s $10,000 annual premium is broken down into two parts: 

1. Life insurance premium: $5,773
2. LTC premium: $4,227

LTC premiums are made up of three components: 

1. Premium to accelerate the death benefit for LTC,
2. Premium for the Continuation/Extension of LTC benefits, and
3. Premium for inflation protection.

After applying the IRS Age-Based Limits, Mike can deduct a total of $69,958 of his $200,000 premium over the course of his 20-year premium schedule. Assuming a 25% tax rate, Mike would see a tax savings of $17,250…or an 8.5% “discount”!

The key to making this work is using an ABLTC product that makes a distinction between life insurance and LTC premiums. We currently work with three products that accommodate this: OneAmerica Asset Care, Securian SecureCare, and Nationwide CareMatters II. Each of these products offers its own unique competitive advantages outside of this similarity… but offering the tax deduction could be the factor that moves client from thinking about ABLTC, to putting pen to paper and signing the application. 

This is a simple example for an individual able to itemize his taxes. The conversation can become a bit complex when working with different types of business owners.

If you’d like to learn more, please call Levon Justice at 1-877-844-0900 or schedule a quick chat.

Thank you,

Jaime Mueller, CLTC
Head of Long Term Care Solutions

So, “PMA”… positive mental attitude, the war cry from W. Clement Stone. Yep, I am a product of the days in our business when we flocked to see people like Mr., Stone, Zig Ziglar, Ben Woodson, Ben Feldman and Joe Gandolfo. I don’t know about you, but I needed those motivating speakers.

Now, I know that it is pretty tough to motivate anyone, but we can set the stage for others to motivate themselves.  The same holds true for consumers. The press, television, blogs and pundits paint a less than rosy picture every morning.  I get up pretty early and scan  a few papers, watch Good Morning America, Fox and Friends and Mornings with Maria. Well, sometimes, it can freeze a person and make them feel as though there are no good times now and maybe not into the future. So, many times, the consumer does nothing with their retirement portfolios. So, it is up to us to be the “motivating factor” that gets them to wake up and take action.

We know that the consumer can’t hit the freeze button and protect their nest eggs. Nope, the world keeps turning, volatility is high and their retirement portfolios can be at risk. By doing nothing, the consumer has made a decision to stick their heads in the sand and just hope. But, hope alone will not get them to the promised land.

We have to assist, find out where it hurts, explore their dreams and desires and ask them what is keeping them up at night. Now, in order to do a good job, we have to get our heads on straight. We need that extra dose of “PMA” . So, take the dosage, offer one to your consumers and assist them in their quest to have a pleasant retirement. How about another motivational quote?  “If it is meant  to be…it is up to me” 

Need some PMA help? Give Ohlson Group a call at 1-877-844-0900 as we are… a different experience.