Can I Deduct Long-Term Care Insurance On Schedule C? + FAQs

No — generally you cannot deduct long-term care insurance premiums on Schedule C as a business expense.

However, self-employed individuals can often deduct these premiums separately on their personal tax return, given certain conditions. Over 30 U.S. states now offer tax breaks for long-term care insurance, highlighting the importance of maximizing every advantage. If you’re a self-employed professional paying for your own long-term care coverage, it’s crucial to understand exactly how and where to claim this deduction.

🏛️ Federal Tax Rules Unpacked: Learn the IRS guidelines for deducting long-term care insurance premiums and how Schedule C and Form 1040 each come into play.
🌐 State-by-State Nuances: Find out how different states offer additional deductions or credits for long-term care insurance (and what that means for your wallet).
⚠️ Common Pitfalls to Avoid: Identify the mistakes that trigger IRS issues – from claiming the wrong amount to misclassifying your premiums.
📊 Real Examples & Scenarios: See breakdowns of scenarios (like a sole proprietor vs. a C-corp owner) and what each means for your long-term care premium deductions.
🔑 Key Terms & Case Insights: Grasp definitions of critical terms (IRS, NAIC, qualified policy) and discover what real tax court cases say about long-term care insurance deductions.

Why Can’t I Deduct My Long-Term Care Premiums on Schedule C?

Schedule C is for business expenses, not personal insurance for the owner. The IRS treats long-term care (LTC) insurance premiums for a sole proprietor as a personal health expense rather than an ordinary and necessary business cost. In other words, even though you pay the premiums to protect yourself, they don’t directly relate to producing business income in the eyes of the tax code. As a result, you won’t find a line on Schedule C to subtract your own LTC insurance premiums.

Instead, the tax law provides a special break for self-employed people: the self-employed health insurance deduction. This is an above-the-line deduction on your Form 1040 (specifically on Schedule 1 of Form 1040) that allows you to deduct qualified health insurance premiums – and yes, that includes qualified long-term care insurance premiums. By taking it above the line, you reduce your adjusted gross income (AGI) directly. That in turn can lower your income taxes and potentially your self-employment taxes (though note that the deduction doesn’t reduce the net earnings used for self-employment tax calculations).

How the Self-Employed Health Insurance Deduction Works

Under federal law (IRC §162(l)), if you’re self-employed you can deduct 100% of your LTC insurance premiums for yourself, your spouse, and your dependents, up to certain dollar limits each year. Importantly, these premiums must be for a tax-qualified long-term care insurance policy (as defined by federal standards – more on that shortly). You claim this deduction on Schedule 1 of Form 1040, not on Schedule C.

Key point: Taking this deduction means you don’t have to itemize your medical expenses to get a tax benefit. It’s often more valuable than a Schedule A medical deduction because it isn’t subject to the 7.5% of AGI threshold that itemized medical expenses face.

However, there are several conditions and limitations to understand before claiming it:

Business income required: You must have had a net profit from self-employment (for example, on Schedule C or F). You can’t deduct more in health/LTC premiums than your business’s net profit for the year. If your business made zero or a loss, this deduction can’t be used at all (though your premiums could still be treated as itemized medical expenses if you itemize).

Eligible policy only: The long-term care insurance contract must be a “qualified” policy under IRS rules. Generally this means it follows the federal definition in the Health Insurance Portability and Accountability Act (HIPAA) and meets consumer protection standards set by NAIC guidelines. Policies that are not tax-qualified (or certain life insurance hybrids that don’t meet the criteria) won’t give you a deductible premium.

Age-based caps: Even though the law says you can deduct premiums, the IRS caps how much of your LTC premium is eligible to deduct each year based on your age. These caps increase as you get older. For example, a taxpayer in their 40s can include only a few hundred dollars of premiums as a deduction in 2025, whereas someone in their 70s can include several thousand dollars. (The exact deductible limits update annually; a person age 61–70, for instance, can deduct around $4,700 of LTC premiums for 2024, and those 71 or older can deduct up to about $5,880.) If you pay more than the limit for your age bracket, the excess premium is not deductible under the self-employed deduction nor as an itemized medical expense.

No other coverage option: You cannot take the deduction for any month in which you were eligible for an employer-subsidized health plan or long-term care plan, whether through your own or your spouse’s employer. In plain terms, if either you or your spouse could have been covered under a job-based plan that month (even if you didn’t actually enroll), you lose the self-employed health/LTC insurance deduction for that month’s premiums. This rule prevents a double benefit when other coverage is available.

No double-dipping: You can’t deduct the same LTC premium twice. If you use the self-employed health insurance deduction, you cannot also count those premiums toward an itemized medical expense deduction. However, any portion of your premium not deducted above-the-line (for example, the amount above your age-based limit, or premiums for months disallowed due to other coverage) can still be included as a medical expense on Schedule A if you itemize.

Why Not Deduct on Schedule C? (The Rationale)

The rationale for this setup is that personal insurance for the owner is viewed like a personal expense – similar to how an employee’s health insurance is not a write-off for the company on the employee’s W-2. Congress created the self-employed health insurance deduction to put self-employed individuals on roughly equal footing with employees who get insurance through work pre-tax.

If you were allowed to shove your LTC premiums onto Schedule C, you’d effectively be getting a double benefit (a business expense deduction that also reduces self-employment tax). The IRS instead wants those premiums handled separately, on your individual return, to clearly separate personal benefits from business operations.

Tip: Deducting the premiums on your 1040 reduces your taxable income without lowering your official net business profit on Schedule C. That means you still pay self-employment tax on your full profit, but you get an income tax break for the premiums. In some cases this actually helps maintain your reported earnings for Social Security purposes (since you’re not artificially shrinking your Schedule C profit), while still giving you a tax deduction.

Different Business Structures, Similar Concepts

While this article focuses on sole proprietors (Schedule C filers), other small-business owners get similar treatment for LTC premiums:

Partnerships & LLCs: If a partnership pays LTC insurance premiums for its partners, those payments are generally treated as guaranteed payments (which the partners include in their income). Each partner can then take the self-employed health insurance deduction on their own Form 1040 for their share of premiums, subject to the same age-based caps and rules above.

S Corporations: When an S corporation pays premiums for a more-than-2% shareholder, it must include that amount in the shareholder’s W-2 wages (it’s not subject to regular payroll tax, but it is taxable income to the owner). The owner can then deduct the premium on their personal return, just like a sole proprietor would. The S-corp itself can usually deduct the cost as an employee benefit or compensation expense. The key is that the ultimate tax benefit still comes through the shareholder’s self-employed health insurance deduction (with the age limit restrictions), not directly as a corporate expense.

C Corporations: A C-corp can treat qualified LTC insurance premiums as a company expense, fully deductible, when it covers employees (including owner-employees). Unlike other entities, a C-corp isn’t subject to the age-based limitation – it can deduct the full premium, and the employee isn’t taxed on that benefit. This is the most generous tax treatment, akin to any other employer-provided health benefit. However, remember that running a C-corp has other tax implications (corporate tax filings, possible double taxation of profits, etc.), so it’s not usually worth restructuring a business solely for the LTC deduction.

In summary, federal law does allow a deduction for long-term care insurance premiums if you’re self-employed, but you take it on Form 1040, not on Schedule C. Understanding this distinction is key to claiming the tax break correctly and staying within IRS rules.

State Tax Breaks for Long-Term Care Insurance (Location Matters)

When it comes to state income taxes, the rules for deducting long-term care insurance premiums can differ significantly from federal law. Some states offer generous incentives to encourage people to buy LTC coverage, while others simply follow the federal rules (or provide no break at all).

Many states now provide some form of tax deduction or credit for long-term care insurance, but the details vary widely. Here are some common patterns across the states:

Tax Credits: A number of states give a tax credit (a direct reduction of your state tax) for a percentage of your LTC insurance premiums. For example, New York offers a 20% credit for qualified LTC premiums paid (capped at $1,500 credit per taxpayer). North Carolina provides a credit equal to 15% of premiums (up to $350 per year), and Colorado allows a credit of 25% of premiums up to $150. Louisiana and Mississippi similarly have credits (10% and 25% of premiums, respectively, with maximums of a few hundred dollars).

Tax Deductions: Other states permit you to deduct some or all of your long-term care premiums on the state return. Often, these deductions mirror federal rules. Alabama, Hawaii, and Maryland allow itemized deductions for LTC premiums similar to the federal medical expense deduction. Wisconsin and West Virginia let you deduct qualified LTC insurance premiums to the extent you didn’t already deduct them on your federal return (to prevent a double benefit). Missouri goes further and allows a 100% deduction of qualified LTC premiums on the state income tax return – effectively giving a full state-level write-off regardless of federal limits.

Age or Income Conditions: Some state incentives apply only to certain taxpayers. Minnesota, for instance, offers a small credit (up to $100 per person, or $200 for a joint return) equal to 25% of LTC premiums, but only if your income is below a set threshold. New Mexico has a credit up to $2,800, but it’s tied to seniors with high medical expenses – it’s available to those age 65+ if they have over $28,000 of unreimbursed medical costs in the year.

No Incentive: A few states have no income tax (like Alaska, Florida, Texas) or simply don’t provide any special deduction/credit for LTC insurance. In those places, your long-term care premium doesn’t affect your state taxes at all. California is an example of a high-tax state that, as of now, offers no extra LTC insurance deduction or credit beyond the normal ability to count premiums as itemized medical expenses (i.e. no special credit on the California return).

Why do these state rules matter? If you live in a state with an LTC insurance credit or deduction, you could save additional money on top of your federal tax savings. For example, a New York resident paying $3,000 in premiums could get a $600 reduction in their NY state taxes (20% of $3,000) – a nice bonus for having the policy. On the other hand, if you live in a state without such benefits, you’ll want to focus on maximizing the federal deduction because that’s the only tax relief you’ll get for those premiums.

Also, keep in mind that state tax laws can change. There’s a trend of states exploring new ways to help residents fund long-term care. Washington State, for example, implemented a program that charges workers a payroll tax to fund a state LTC benefit, but it allows an exemption for individuals who already own private LTC insurance (essentially rewarding those who took the initiative). Other states are considering similar approaches. These developments aren’t deductions or credits in the traditional sense, but they show that where you live can impact your long-term care planning costs. It’s wise to check your state’s latest tax rules (or consult a professional) because the landscape is continually evolving.

Common Mistakes to Avoid with LTC Insurance Deductions

Even savvy taxpayers can slip up when dealing with long-term care insurance premiums. Here are some common mistakes to watch out for (and avoid):

❌ Putting LTC Premiums on Schedule C: This is the #1 error: a sole proprietor might be tempted to list their long-term care insurance cost as a business expense on Schedule C (perhaps under “insurance” or “employee benefit programs”). Don’t do it – as explained above, personal LTC premiums belong on your Form 1040 via the self-employed health insurance deduction, not on Schedule C. Misclassifying it on Schedule C can draw IRS scrutiny and will likely be disallowed in an audit.

❌ Deducting More Than Allowed: Another frequent mistake is claiming the full amount of premiums paid without respecting the age-based limits. For example, if you’re 55 and paid $3,000 in premiums, you cannot deduct the entire $3,000 – only the allowed portion (say around $1,760 for someone in their 50s, depending on the year). Claiming the whole amount will stick out as incorrect. Always check the current IRS limits for deductible premiums based on age, and only deduct up to that amount.

❌ Ignoring the “Eligible for Employer Plan” Rule: Some self-employed folks overlook this rule. If you or your spouse had an opportunity to join an employer’s health plan (or an employer’s LTC insurance plan) during the year, you cannot take the self-employed deduction for the months you were eligible. Example: If your spouse’s job offered health insurance you could have been added to, then even if you declined that coverage your self-paid LTC premiums are not deductible for those months. Failing to adjust your deduction in such cases is a mistake that the IRS can catch (for example, if your spouse’s W-2 shows that family health coverage was offered).

❌ No Self-Employment Income (or Low Income): Remember, this deduction is limited by your self-employment earnings. If your business had a loss or very little net profit, you can’t create or increase a deduction beyond that income. Some people attempt to deduct premiums in a year their business didn’t actually make money – unfortunately, that deduction will be denied. In such cases, your only chance to deduct might be as an itemized medical expense, but then you’re subject to the 7.5% AGI threshold (and many people in a loss year may not itemize or have enough expenses to exceed that threshold anyway).

❌ Using a Non-Qualified Policy: Not all products marketed for long-term care are tax-qualified insurance policies. If you mistakenly try to deduct premiums for an ineligible policy (for example, a life insurance policy with a long-term care rider that doesn’t meet the tax-qualified definition), the deduction won’t hold up. Make sure your policy is tax-qualified – it should say so in the policy documentation (almost all traditional LTC policies sold after 1996 are). If your policy isn’t tax-qualified, its premiums are treated like personal expenses with no special tax break (other than possibly counting toward itemized medical costs).

Real-Life Examples: How LTC Premium Deductions Play Out

Sometimes it helps to see how the rules apply in practice. Below are three example scenarios and the tax outcome for each:

Scenario	Deduction Outcome
Solo Consultant, age 45, $2,500 LTC premium (self-employed)	Can deduct $880 of the premium (2025 limit for age 41–50) as an above-the-line self-employed health insurance deduction on Form 1040. The remaining $1,620 is not deductible (unless he itemizes medical expenses and exceeds the threshold). No deduction is taken on Schedule C.
Sole Proprietor (age 62) with Spouse Employee, $5,000 joint LTC policy	The business covers a $5,000 premium for a tax-qualified LTC policy that insures both the owner (62) and spouse (60) through a shared coverage rider. The spouse is a bona fide employee of the business. Outcome: The entire $5,000 is deductible on Schedule C as an employee benefit expense. The owner does not need to use the self-employed health deduction for this premium. (By structuring the coverage as part of the spouse’s employment, the age-based caps were effectively bypassed in this scenario.)
C-Corp Owner, age 55, $3,000 LTC premium	The C-corporation pays the $3,000 premium for the owner’s qualified LTC insurance as part of an employee benefit plan. The corporation deducts 100% of the premium as a business expense. The owner (employee) does not include this benefit as taxable income, and no age limit applies. This is the most favorable tax outcome (full deduction, tax-free benefit to the insured).

Comparing Deduction Options and Strategies

Not everyone can deduct their long-term care insurance in the same way. Here’s a quick comparison of how different situations stack up:

Self-Employed vs. Employee: If you’re self-employed, you have the unique advantage of the above-the-line deduction for LTC premiums (via the self-employed health insurance route). By contrast, someone who isn’t self-employed (say, an employee with no business income) generally cannot deduct their LTC premiums except by itemizing them as medical expenses on Schedule A – which is often difficult due to the 7.5% AGI hurdle. In short, being self-employed opens a door to deduct LTC premiums that regular employees don’t directly have (unless their employer provides a plan).

Above-the-Line Deduction vs. Itemizing: The self-employed health insurance deduction (above-the-line) is usually more valuable than an itemized deduction. Above-the-line deductions reduce your AGI and are not limited by thresholds. Itemizing LTC premiums as part of medical expenses only helps if all your medical costs are high enough. For many taxpayers, the self-employed route yields a deduction where itemizing would yield nothing.

Health Savings Account (HSA) Alternative: If you have an HSA, you can use those pre-tax dollars to pay long-term care insurance premiums (up to the same age-based limits each year). This is an alternative way to get a tax benefit from LTC premiums – effectively similar to a deduction since HSA contributions are pre-tax. However, you can’t double-dip: premiums paid with tax-free HSA withdrawals can’t be claimed again as a deduction. HSAs are handy for those who might not qualify for the self-employed deduction (for example, if you’re an employee), but you need to have a high-deductible health plan to contribute to an HSA in the first place.

LTC vs. Regular Health Insurance: It’s worth noting that deductions for regular health insurance premiums (medical insurance) are not capped by age the way LTC insurance is. A self-employed person can generally deduct 100% of their health insurance premiums, but only a limited dollar amount of LTC premiums. This is simply how the law was written – Congress imposed specific caps for long-term care to control costs. So, if your total health coverage premium is $10,000 and $3,000 of that is for an LTC policy (and you’re, say, age 45), you might be able to deduct the full $7,000 for health insurance plus only about $880 of the LTC portion.

Business Structures: Using different business entities can change the picture. As discussed, a C-corp can fully deduct LTC premiums for an owner-employee with no personal limit, whereas a sole proprietor or partner has to live with the age-based caps on their personal return. Some small business owners intentionally employ their spouse or set up certain arrangements to maximize deductions (for instance, the spouse-employee health plan strategy). While these strategies can yield bigger deductions, they come with additional paperwork and requirements to be valid.

The best approach depends on your situation. The key is understanding which route gives you the maximum tax benefit and making sure you follow the rules for that route.

Pros and Cons of Deducting Long-Term Care Insurance Premiums

Pros	Cons
Tax Savings: Lowers your taxable income. Self-employed individuals can deduct premiums above the line, avoiding the 7.5% AGI hurdle and potentially saving a significant amount in taxes.	Limited Deduction: You might not be able to deduct the full premium. Age-based caps restrict how much counts, and if your premiums are high, part of the cost won’t get a tax break.
Covers Family: Premiums for your spouse and dependents can be included. This means a self-employed person can get a deduction for covering their whole family’s long-term care insurance (within the allowed limits).	Must Have Income: The deduction isn’t available if your business has no net profit. Also, if you (or your spouse) had access to employer coverage, that knocks out the deduction for those months.
Alternative Strategies: With planning (like using a spouse employee or a C-corp structure), you can potentially deduct 100% of premiums through the business. The tax code provides avenues to maximize the deduction if you set things up properly.	Complex Rules: Navigating the deduction requires following a lot of rules – age limits, coverage eligibility, proper tax form reporting. It’s easy to make a mistake. Some taxpayers may need professional advice to do it right.

Definitions of Key Terms

To ensure clarity, here are brief definitions of some key terms and entities mentioned in this discussion:

IRS (Internal Revenue Service): The U.S. government agency responsible for tax collection and enforcement of tax laws. The IRS sets the rules on what deductions are allowed and how to claim them (like the rules for deducting long-term care insurance).

Schedule C: A form (Schedule C of Form 1040) used by sole proprietors and single-member LLCs to report business income and expenses. If you’re self-employed, you file Schedule C to calculate your business profit or loss. Personal expenses, such as your own long-term care insurance premiums, generally do not go on this schedule.

Form 1040: The main individual income tax return form in the United States. Most deductions and credits ultimately flow to Form 1040. The deduction for self-employed health insurance (including LTC premiums) is taken on Form 1040’s Schedule 1, which feeds into the adjusted gross income on the 1040.

Schedule A (Itemized Deductions): The form where individual taxpayers list personal deductible expenses (medical, taxes, mortgage interest, charitable contributions, etc.) if they are not taking the standard deduction. Medical expenses, including qualified long-term care premiums, go on Schedule A – but only the portion exceeding 7.5% of your AGI is actually deductible. Schedule A is relevant if you’re trying to deduct LTC premiums as an itemized medical expense rather than through a business.

Adjusted Gross Income (AGI): Your gross income minus certain above-the-line deductions (but before itemized deductions or standard deduction). AGI is an important number because many tax benefits (including the medical expense deduction threshold) are based on a percentage of AGI. When you deduct LTC premiums through the self-employed health insurance deduction, you are reducing your AGI.

NAIC (National Association of Insurance Commissioners): An organization consisting of state insurance regulators that creates model insurance laws and guidelines. In the context of long-term care insurance, the NAIC developed standards for what constitutes a “tax-qualified” LTC policy. Federal law (via HIPAA 1996) references these standards. Essentially, a policy following NAIC model provisions (guaranteed renewability, consumer protections, standard benefit triggers, no cash value, etc.) will be considered a Qualified Long-Term Care Insurance contract for tax purposes.

Tax-Qualified Long-Term Care Insurance: A long-term care insurance policy that meets federal criteria under IRC Section 7702B (the rules set by HIPAA and NAIC models). Premiums for tax-qualified policies are eligible for tax deductions (subject to the limits we’ve discussed), and benefits paid out by the policy are generally non-taxable. Almost all traditional LTC policies sold today are tax-qualified. Non-qualified policies (rare in the market now) wouldn’t get these tax advantages.

Self-Employed Health Insurance Deduction: The special deduction that allows self-employed individuals (including partners and >2% S-corp shareholders) to deduct health insurance premiums for themselves and their family. This includes premiums for medical, dental, vision, and qualified long-term care insurance. It’s an “above-the-line” deduction, meaning it reduces taxable income directly on the Form 1040. One key point: it cannot exceed the self-employed person’s business income for the year and is subject to the other conditions we covered (like the no-other-coverage rule).

Long-Term Care (LTC) Insurance Premium Limits: The age-based dollar caps on how much premium can be treated as a deductible expense per person each year. These limits are updated annually by the IRS. For example, in 2025 a person age 50 might be limited to a little under $1,000, while a person over 70 can deduct nearly $6,000 of premiums. Any premiums above those limits are considered personal expense (or just nondeductible).

What the Courts Say: Key Tax Rulings on LTC Premium Deductions

Tax courts have weighed in on long-term care insurance deductions in a number of cases. The rulings generally reinforce the IRS rules – rewarding those who follow the proper procedures and denying deductions to those who don’t. Here are two illustrative rulings:

Spouse-Employee Plan Approved (Tax Court, 2006): In one case (often referred to as Speltz v. Commissioner), a daycare business owner employed her husband and set up a formal medical expense reimbursement plan through her sole proprietorship. The plan reimbursed their health insurance and long-term care insurance premiums.
- She deducted those reimbursements as a business expense on Schedule C. The IRS challenged it, but the Tax Court sided with the taxpayer. The court found that because there was a bona fide employer-employee relationship and a legitimate plan in place (with documentation and the husband performing actual work), the insurance premiums were deductible as an employee benefit. This case essentially validated the strategy of hiring a spouse and paying family insurance through the business – as long as it’s done correctly.

Personal Premium on Schedule C Disallowed: In contrast, the courts have disallowed deductions when taxpayers simply put personal insurance premiums on their Schedule C without any qualifying plan. For example, in a 2017 Tax Court Memorandum decision, a couple reported their own medical insurance (including what appeared to be long-term care coverage) as a “medical expense” on their Schedule C business form.
- The Tax Court upheld the IRS in denying that deduction, explaining that personal insurance is not a direct business expense. The correct way for a sole proprietor to deduct such premiums is through the self-employed health insurance adjustment on Form 1040, not as a line item on Schedule C. This ruling serves as a warning: if you try to write off your long-term care premiums improperly as a business expense, the IRS can and will deny it.

Bottom line from the courts: When you follow the rules – use the proper forms, have proper arrangements (like a valid employee benefit plan) – you can get the deduction. If you cut corners and claim personal expenses as business write-offs, the deduction won’t survive an audit or court challenge.

FAQ: Deducting Long-Term Care Insurance Premiums

Q: Can I deduct long-term care insurance premiums on Schedule C?
A: No. Personal long-term care premiums are not deductible on Schedule C. If you’re self-employed, you can deduct them on your Form 1040 (via the self-employed health insurance deduction), not as a business expense.

Q: Are long-term care insurance premiums tax-deductible for the self-employed?
A: Yes. If you have self-employment income, you can deduct qualifying long-term care insurance premiums above the line on your Form 1040 (subject to age-based limits and other requirements).

Q: Do I need a tax-qualified long-term care policy to claim the deduction?
A: Yes. Only premiums for a tax-qualified long-term care insurance policy are eligible for tax deductions. Non-qualified policies generally do not receive any special tax deduction.

Q: Is there a limit to how much long-term care premium I can deduct per year?
A: Yes. The IRS sets annual limits based on your age. You can only deduct up to the age-based maximum for each person’s premium; anything above that amount isn’t deductible.

Q: Can I deduct long-term care insurance premiums without itemizing?
A: Yes, if you’re self-employed. You can take the self-employed health insurance deduction (including LTC premiums) directly on your tax return, so you don’t need to itemize medical expenses.

Q: What if I was eligible for coverage through my spouse’s employer?
A: No. You cannot deduct long-term care premiums for any month you were eligible to participate in an employer-subsidized health or LTC plan (even if you didn’t actually use that coverage).

Q: Are benefits received from a long-term care insurance policy taxable?
A: No, not in most cases. Payouts from a tax-qualified long-term care policy are generally tax-free (up to certain daily limits), even if you deducted the premiums.

Q: Can an S corporation owner deduct long-term care insurance?
A: Yes. If you’re a >2% S-corp shareholder, the S-corp can pay the premium (reported as income on your W-2) and you then deduct it on your Form 1040, subject to the age-based limits.

Q: Do any states give tax credits for long-term care insurance?
A: Yes. Many states offer tax incentives. For example, New York gives a 20% credit for LTC premiums, and several states allow deductions. It depends on your state’s tax laws.

Q: Will hiring my spouse help me deduct more of my LTC premiums?
A: Yes. If your spouse is a legitimate employee and your business provides an LTC insurance policy as a benefit, the business can deduct 100% of the premiums (covering you both) as an expense.