Group Long Term Care Insurance
To provide an employee with a monthly cash benefit in the event he/she is:
• Functionally dependent, and
• Satisfies the waiting period.
The benefit can provide financial flexibility so the individual can be cared for in a manner desired by them. Needs may include:
• Care costs or medical expenses not covered under government plans
• Payments on mortgage debt, credit card debt, or personal lines of credit
• Home renovations required to make living space suitable
• Replacing caregiver’s (e.g., spouse) lost income
Structure of Plan:
Owner: Corporation or employee, depending upon the structure
Premium Payor: Corporation
Benefits Payable To: Employee would receive the monthly cash benefit under the contract.
In the employee owned context, the employer may consider grossing up the employee benefit for the premium, for tax purposes, so the employee has no tax cost for the benefit. A Direction to pay can be used for the benefits from a Return of Premium on Death Rider only if the insured person is NOT the policy owner. In the corporate owned context, if the corporation intends to receive the Return of Premium on Death benefit (that is, does not execute a direction [or beneficiary designation in provinces that permit this] in favour of the employee) it should consider whether deducting the Rider premium is appropriate. Carefully consider if Return of Premium on Death Rider is added to the plan.