By Harish Thadhani, Long Term Care Insurance Specialist

One of the most common problems we face in the insurance industry is being able to offer our clients quality benefits at a reasonable price.  We often find our clients not adequately insured because of the high cost of certain plans.  Trying to protect a client from a catastrophic or disabling loss has always been a problem.  Physicians really need to deduct the premiums for a disability income plan because the cost is so high but that makes the benefit totally taxable.  As an example, a physician who earns $20,000 per month can qualify for 60% of their monthly income ($12,000 per month).  If the physician deducted the premium the after tax benefit would be $8,400 per month.  Not enough to cover their mortgage expenses, children’s educational costs, vehicle payments, property taxes, insurance costs, medical expense, regular living expenses and the deductibles and coinsurance they incur monthly.

Finally we now have an alternative plan.  A plan that is 100% tax deductible* for C-corporations and the benefits received are tax free up to $9,000 per month.  Imagine deducting the premiums then receiving the benefits tax free when you need them the most.  If you don’t use the benefits, after death all the premiums are returned to your estate / beneficiary 100% tax free (with the ROP rider).  Introducing Long Term Cash insurance.

Unlike other insurance policies for long term care, our policy offers physicians cash benefits.  Not reimbursement or indemnity plans that require services rendered and only pay for services performed on a daily basis, these plans pay cash.  We only company who offer truly cash benefits for long term care.  Our cash plan has no restrictions, limitations or exclusions contained in the program.  This long term cash plan is a tax qualified LTC plan.

To qualify for benefits under this plan an individual would need to be unable to perform 2 out of 6 activities of daily living.  These are the things we normally do in daily living for self care:  bathing, continence, toileting, dressing, eating and transferring.  Or any cognitive impairment would trigger benefits.

Long Term Cash plans unlike disability income plans do not limit benefits to a percentage of income, you may purchase up to $12,000 per month of benefit regardless of your income or the amount of disability insurance you currently have in force.  Long Term Cash policies may continue past age 65 and have no age restrictions or employment restrictions to stay in effect. They are there when you need them the most.  Long Term Cash plans have no financial qualifications. These plans are also PORTABLE.  They can stay in effect even if a physician elects to stop practicing medicine. Plus these plans offer WORLDWIDE COVERAGE.  Benefits are payable anywhere in the world. The physician can reside anywhere in the world and benefits are paid in cash, U.S. dollars, to the insured.

One other major factor is that these Long Term Cash plans can be purchased on the physician and their spouse, without including any other employee.  The practice has the ability to choose who receives the program and still gets the tax deduction.  The Health Insurance Portability and Accountability Act of 1996 permits this deduction.

The best way to summarize this plan is as follows:

• Plan may be purchased during the physicians high income years, and paid up at age 65
• This plan is deductible as a business expense.
• Physicians may include coverage for a spouse.
• Benefits up to $9,000 per month are totally tax free.*
• Inflation rider available, at compounding 5% x2, which can increase the maximum monthly benefit from $12,000 to $24,000 in 14 to 15 years.
• Worldwide coverage.
• Return of Premium (ROP) rider available, which allows all premiums to be returned to the estate/beneficiary upon death.

We are finally able to offer members of The American Association of Physicians of Indian Origin a quality program and a 5% discount for all members.

*Please consult a tax professional for advice on your own situation.