Many high-net-worth and business-owner clients assume they can self-fund the cost of long-term care (LTC). To a certain extent, they’re right. But while they can afford the expense, should they? The financial, tax, and emotional consequences often surprise even the wealthiest families.
Making the case for LTC insurance for these clients requires a different approach. They may need help seeing how self-funding extended care expenses can endanger their financial legacy. Setting cost aside, you can focus on the other benefits—smart risk management, wealth preservation, peace of mind, and even tax advantages for business owners.
First, identify your clients’ unique financial pain points—emotional or practical concerns that self-funding may fail to address. These concerns naturally open the door to positioning LTC insurance as the smarter, more strategic alternative.
“I want to maximize the amount I leave to heirs and charity.”
Clients who have worked hard to build and preserve wealth may be shocked at how quickly long-term care costs can erode their assets. For a high-net-worth individual, an LTC event that lasts three years can easily exceed $1,000,000 or more in today’s dollars—money that would otherwise fund planned inheritances and charitable legacies. LTC insurance provides a dedicated funding source for these ongoing services. Medical and custodial expenses are covered without impacting other financial and estate plans.
“I have the net worth to cover an LTC event, but I may not have the liquidity.”
LTC costs continue to rise with no cap on out-of-pocket expenses, making self-funding unpredictable. A sudden need for long-term care can reduce wealth, not only through actual expenses but also through the forced liquidation of income-producing assets—perhaps for less than full value or in a way that creates unexpected tax consequences. This scenario can disrupt generational wealth preservation. For high-net-worth individuals, LTC insurance ensures that portfolio liquidity remains intact. No one is forced to sell off investments or divert income streams. Instead, clients can preserve their assets for other purposes.
“I hate the idea of paying premiums for coverage I may never use.”
LTC insurance is a risk management tool. It’s difficult or impossible to determine who will need care, how long it will last, or what it will ultimately cost—but insurance transfers that unpredictable risk from the client’s balance sheet to the insurer. For many wealthy families, the preferred solution is a hybrid LTC policy. By combining life insurance with long-term care benefits, hybrids resolve two concerns at once—funding care if it’s needed and providing wealth for heirs if it’s not. For clients wary of “use-it-or-lose-it” coverage, hybrids ensure no premium dollars are wasted.
“I don’t want to go into a nursing home.”
High-net-worth clients may have the idea that LTC insurance will help them cover costs only if they go into a nursing home—a scenario that holds little appeal for many people. Educate clients on the fact that LTC insurance goes well beyond traditional nursing home coverage. In fact, popular hybrid policies allow clients to use funds for in-home care, assisted living, and other personalized care options. By expanding the client’s idea of how coverage works, you reframe the value they see in the product.
“I don’t want to burden my adult children.”
Without LTC insurance, there is a greater likelihood that the children of high-net-worth individuals may feel the need to step in to help manage medical issues on top of their own busy careers and family responsibilities. Wealth does not minimize the emotional toll of caregiving. As family members scramble to organize care and manage finances, they may not always agree on the care plan, implementation, timing, or other basic factors, potentially causing discord. LTC insurance helps prevent this scenario by providing resources that cover medical expenses, in-home support, facility-based care, and other essential services, easing the burden on loved ones.
“As a business owner, I have many other expenses that take higher priority.”
One of the most compelling reasons for business owners to consider LTC insurance is the tax treatment of premiums. Unlike individual taxpayers, who face restrictive limitations on premium deductibility, business owners have far more favorable options. (Policy structure is key to tax deductibility—LTC premiums must be separate and identifiable.)
• C corporations. Eligible business-paid LTC insurance premiums are fully deductible as a business expense, offering immediate tax savings with no age-based limits.
• Pass-through entities. Owners of S corporations, LLCs, or partnerships can deduct eligible premiums on their personal tax returns (subject to age-based limits) without the need to itemize deductions or pass the 7.5%-of-AGI limitation for out-of-pocket medical expenses.
Business owners can also extend coverage as a benefit for top executives or key employees, leveraging tax efficiencies while improving retention and morale, which are top concerns for many companies. LTC insurance can also serve as part of a succession plan, protecting both the owner and the business itself. These deductions effectively lower the cost of LTC insurance, making it a smart, tax-efficient choice for business planning.
Positioning LTC Coverage as a Smart Option
LTC planning isn’t about whether clients can afford care—it’s about whether they want to risk their wealth, family harmony, or business legacy by self-funding it. You have the opportunity to reframe LTC insurance as smart risk management for affluent clients. Start the conversation early, especially around hybrid policies that meet multiple goals. You’ll not only protect your clients but strengthen your role as a trusted advisor.
