Is Long Term Care Insurance Benefits Taxable?

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   William Bridgers

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

   Payments of long-term care claims by an insurance company are generally not taxable as regular income.  However, the policy title page must clearly state that the policy is a "tax-qualified long-term care insurance policy" or "TQ".  Some carriers still sell "non-tax-qualified" long-term care policies (NTQ) in which the benefits may be taxable as regular income.  The reasoning is that NTQ policies are more generous in qualifying someone to go on claim and that other policy features may provide a broader range of care.  Whether those attributes would offset the possible taxation of the benefit is debatable.  Most long-term care policies today are "TQ".

   Answered on July 14, 2013

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