What Is Tax Qualified Long Term Care Insurance? 
A `` tax-qualified '' Long Term Care Insurance policy is one that conforms to requirements under IRC Section 7702B . Among other requirements , benefits must be triggered by inability to perform two out of six standard Activities of Daily Living -LRB- ADLs -RRB- or by cognitive impairment , the policy must be guaranteed renewable , it can not provide a cash surrender value , and it has to incorporate specified consumer protection provisions . The benefit of having a tax-qualified policy is that premiums paid will be partially tax-deductible , and benefits received by reason of claims paid are exempt from income tax . 