Qualified Long-Term Care

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Qualified Long-Term Care

Non-taxable benefits one receives from a long-term care insurance policy covering a long-term, non-life-threatening condition. In order for the benefits to be non-taxable, one must require care for at least 90 days and must be unable to perform at least two of the activities of daily living. Qualified long-term care was instituted in the United States in 1997.
References in periodicals archive ?
The addition of the QLTC rider allows the life insurance contract to be accessed for living benefits by paying down the face amount when the insured qualifies for LTC benefits.
The PPA modified the rules that govern tax-free exchanges of life insurance and annuity contracts into updated contracts that include the QLTC rider or into traditional stand-alone LTCI.
Monthly QLTC rider fees on these types of policies are taken from cash values, and these internal policy distributions are viewed as distributions from the policy.
However, the provisions of the PPA change the tax treatment of such distributions that are used to pay rider fees for QLTC riders, and such distributions are no longer treated as distributions of income.
A life insurance policy without a long-term care rider can be exchanged for a life insurance policy with a QLTC insurance rider.
Conversely, a life insurance policy with a QLTC insurance rider can be exchanged, tax-free, for a life insurance policy without a long-term care rider.