Instructions For Form 1099-Ltc - 2006
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26Instructions for Policyholder
Accelerated death benefits. Amounts paid as accelerated death
A payer, such as an insurance company or a viatical settlement
benefits are fully excludable from your income if the insured has
provider, must give this form to you for payments made under a
long-term care insurance contract or for accelerated death benefits.
been certified by a physician as terminally ill. Accelerated death
Payments include those made directly to you (or to the insured) and
benefits paid on behalf of individuals who are certified as chronically
those made to third parties.
ill are excludable from income to the same extent they would be if
paid under a qualified long-term care insurance contract.
A long-term care insurance contract provides coverage of
expenses for long-term care services for an individual who has been
Account number. May show an account or other unique number the
certified by a licensed health care practitioner as chronically ill. A life
payer assigned to distinguish your account.
insurance company or viatical settlement provider may pay
Box 1. Shows the gross benefits paid under a long-term care
accelerated death benefits if the insured has been certified by either
insurance contract during the year.
a physician as terminally ill or by a licensed health care practitioner
Box 2. Shows the gross accelerated death benefits paid during the
as chronically ill.
year.
Long-term care insurance contract. Generally, amounts received
Box 3. Shows if the amount in box 1 or 2 was paid on a per diem
under a qualified long-term care insurance contract are excluded
basis or was reimbursement of actual long-term care expenses. If
from your income. However, if payments are made on a per diem
the insured was terminally ill, this box may not be checked.
basis, the amount you may exclude is limited. The per diem
Box 4. May show if the benefits were from a qualified long-term care
exclusion limit must be allocated among all policyholders who own
insurance contract.
qualified long-term care insurance contracts for the same insured.
See Pub. 502, Medical and Dental Expenses, and Form 8853, Archer
Box 5. May show if the insured was certified chronically ill or
MSAs and Long-Term Care Insurance Contracts, for more
terminally ill, and the latest date certified.
information.
Per diem basis. This means the payments were made on a periodic
basis without regard to the actual expenses incurred during the
period to which the payments relate.
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