How to Insure Your Income: Long-Term Care Claims

The main concerns people have when they make LTC insurance claims are tax-related.

While disability income benefits under individual policies are received tax-free, LTC benefits currently are taxable in most cases. The debate over the nature of LTC insurance is not fully resolved.

Many of the services provided (housing, meals, etc.) do not reflect medical care or treatment, but other services (nursing care, home health care and physical therapy), which may include elements of medical treatment or may require a certification of medical necessity. Some lawmakers are arguing that LTC insurance should be treated more like medical coverage, and that the tax laws should be changed.