The premiums paid for a qualified long-term care insurance policy are deductible from income for purposes of calculating Alabama income tax (AL Code Sec. 40-18-15). To qualify for the deductions, the policy must:
• Offer coverage only for qualified long-term care services and benefits incidental to the coverage;
• Provide for guaranteed renewal;
• Have no cash surrender value; and
• Provide that all refunds of premiums and all policyholder dividends or similar amounts are to be applied to reduce future premiums or to increase future benefits (AL Code Sec. 27-47-2).
“Qualified long-term care services” includes care for necessary diagnostic, preventive, therapeutic, and rehabilitative services and maintenance, assisted living, or personal care services required by a chronically ill individual in a qualified facility, or services provided pursuant to a plan of care prescribed by a licensed healthcare practitioner (AL Code Sec. 27-47-1).