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| Tax Considerations |
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| Tax Qualified: |
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In legislation effective January 1, 1997, Congress required companies to
offer "tax qualified" policies which contain some standard benefits.
Premiums for tax qualified policies can be tax deductible and benefits are
received tax free. Benefits are triggered for tax qualified policies when
one cannot perform a specified number of Activities of Daily Living (ADLs).
ADLs are bathing, dressing, continence, toileting, eating, and
transferring. Most policies begin paying benefits when two out of six of
these ADLs cannot be performed without assistance for more than 90 days
as certified by a licensed health care practitioner. Benefits can also
be triggered by a cognitive impairment such as Alzheimer's.
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| Non Tax Qualified: |
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These policies have a less strict benefit trigger of "medical necessity".
The premiums for these policies are not tax deductible and Congress has
been unclear as to whether benefits can be received tax free, so there
is a chance you would pay taxes on benefits received under one of these
policies.
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Advantages of Buying Young |
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Supplement
