What Is A Tax Qualified Long Term Care Insurance?

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   William Bridgers

   Specialist, LTCi, DI, Annuities, Life, Designs In Life, LLC, Utah

   Tax-qualified long-term care insurance (TQ) pays out a benefit to qualifying insureds that is not taxable as ordinary income.  Virtually all long-term care insurance policies sold today are TQ.  But, some carriers still sell policies that are non-tax qualified (NTQ) because such a policy does not come under the same regulation as a TQ policy.  The argument by some is that with an NTQ policy it is easier for the insured to qualify for the payment of long-term care costs.  The language of the NTQ policy may also be more generous with regard to benefits, features, and riders.  Whether those factors would be worth the possible taxation of the benefits is debatable.

   Answered on July 23, 2013

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