For Tax-Qualified Long-Term Care Insurance policies that pay benefits under an Indemnity Model, benefit payments are subject to a daily dollar cap.
 

If the individual taxpayer receives Tax-Qualified Long-Term Care Insurance benefits in excess of this annual daily limit, those "excess benefits" will be considered income for tax purposes. However, the taxpayer may exclude from income the "excess benefits" to the extent of the individual's actual unreimbursed Tax-Qualified Long-Term Care expenses.

We do not provide tax or legal advice. Any decisions whether to implement these ideas should be made by the client in consultation with professional financial, tax, and legal counsel.