When you add the long-term care rider to your policy, any payout is an acceleration of your life insurance death benefit.
You select the long-term care specified amount when you buy your policy.
The long-term care benefits are paid income tax free after qualifying requirements are met.
If you never need long-term care, your beneficiaries will receive an income tax-free death benefit as long as your policy remains in force.
If you do need long-term care, your beneficiaries will still receive the greater of any unused long-term care benefits or 10% of the based policy’s specified amount (less any policy indebtedness) thanks to the guaranteed minimum death benefit.
Only pays for skilled care, where the patient shows signs of improvement.
Covers the costs of long-term care temporarily, up to 100 days in a skilled nursing facility after a hospitalization of three days or more, after a three consecutive day stay under treatment in a hospital. After 20 days, the patient incurs a $148.00 co-pay (2013).
Requires a person to spend down or have countable assets of $2,000 or less (depending on the state), to receive long-term care.2