2. Benefits you receive and use to pay for 2. The benefits you receive may or may not count as long-term care services generally aren’t income. Congress and the U.S. Department of the counted as income. Benefits you receive Treasury haven’t clarified this area of the law. from policies that use the expense-incurred may be taxable if the benefits are method greater than the costs of long-term care services. All benefit payments up to the federally approved per diem (daily) rate are tax-free from policies that use the indemnity or disability methods, even if the benefits are greater than your expenses. 3. To trigger the benefits under your policy, 3. Policies can offer a different combination of benefit the federal law requires you to be unable to triggers. Benefit triggers aren’t restricted to two do two ADLs without substantial ADLs. assistance. 4. Policies can’t use necessity” as a 4. The benefit triggers can be necessity” “medical “medical benefit trigger. and/or other measures of disability. 5. Policies can require that a person be 5. Policies don’t have to require the disability to last at chronically ill or have disability lasting at least 90 days. least 90 days. 6. Policies that cover cognitive impairment 6. Policies don’t have to require “substantial must require supervision” as a to trigger benefits for cognitive “substantial benefit trigger. impairments. Whether you buy a tax-qualified or a non-tax-qualified policy, consult with your tax consultant or legal advisor about the tax consequences for you. Pooled Benefits and Joint Policies You may be able to buy a long-term care insurance policy that covers more than just one person, or more than one kind of long-term care service. The benefits these policies provide often are called benefits.” “pooled One type of pooled benefit covers more than one person, such as a husband and wife, or domestic partners, or two or more related adults. This type of benefit sometimes is called a policy” or a benefit.” The total benefit usually applies to all of the individuals the policy “joint covers. If one covered individual collects benefits, that amount is subtracted from the total policy
2. Benefits you receive and use to pay for long-term care services generally aren’t counted as income. Benefits you receive from policies that use the expense-incurred method may be taxable if the benefits are greater than the costs of long-term care services. All benefit payments up to the federally approved per diem (daily) rate are tax-free from policies that use the indemnity or disability methods, even if the benefits are greater than your expenses. 2. The benefits you receive may or may not count as income. Congress and the U.S. Department of the Treasury haven’t clarified this area of the law. 3. To trigger the benefits under your policy, the federal law requires you to be unable to do two ADLs without substantial assistance. 3. Policies can offer a different combination of benefit triggers. Benefit triggers aren’t restricted to two ADLs. 4. Policies can’t use “medical necessity” as a benefit trigger. 4. The benefit triggers can be “medical necessity” and/or other measures of disability. 5. Policies can require that a person be chronically ill or have disability lasting at least 90 days. 5. Policies don’t have to require the disability to last at least 90 days. 6. Policies that cover cognitive impairment must require “substantial supervision” as a benefit trigger. 6. Policies don’t have to require “substantial to trigger benefits for cognitive impairments. Whether you buy a tax-qualified or a non-tax-qualified policy, consult with your tax consultant or legal advisor about the tax consequences for you. Pooled Benefits and Joint Policies You may be able to buy a long-term care insurance policy that covers more than just one person, or more than one kind of long-term care service. The benefits these policies provide often are called “pooled benefits.” One type of pooled benefit covers more than one person, such as a husband and wife, or domestic partners, or two or more related adults. This type of benefit sometimes is called a policy” or a “joint benefit.” The total benefit usually applies to all of the individuals the policy covers. If one covered individual collects benefits, that amount is subtracted from the total policy
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