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LTC as an Executive Benefits Package Component
Watch Time: 2 Mins Reading Time: 3 Mins Presented by Hollowtree Updated April 27, 2026
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When you're designing an executive compensation package, the goal is retention. You want the executive to stay, to feel financially secure, and to recognize that the package they have access to through your organization is something they couldn't replicate on their own.
Group long-term care insurance checks all three of those boxes -- and it does it with tax advantages that make it more cost-efficient than most other executive benefit structures.
Here's how the tax treatment works.
For C-corporations, premiums paid for Section 7702(b) qualified LTC plans are deductible as a business expense. That means the employer gets a deduction for providing the benefit. And on the employee side, benefits paid out under a qualified LTC plan are received tax-free. That's a meaningful financial advantage compared to paying for long-term care out of pocket in retirement.
For executives -- who are typically in the highest tax brackets -- both the deductibility and the tax-free benefit structure have real dollar value.
Group LTC also solves an underwriting problem. Individual LTC for a 55-year-old executive can cost $4,000 to $8,000 per year, with full medical underwriting and no guarantee of qualification. Group access relaxes underwriting substantially and typically reduces per-person cost by 30 to 50 percent.
Carve-out structures allow employers to offer richer LTC benefits to executives than to the general employee population -- without the cost of extending full benefits to every employee.
Hollowtree designs executive carve-out LTC programs that satisfy Section 7702(b) requirements and integrate with your existing compensation architecture.
Book a 15-minute briefing to discuss what an executive LTC structure looks like for your organization.
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Hollowtree
Insurance Specialists