Final answer:
A tax-qualified LTC insurance policy meets certain consumer protection standards, requires inability to perform multiple ADLs, and the physical impairment must generally be expected to last at least 90 days.
Step-by-step explanation:
The criteria that identifies a tax-qualified Long-Term Care (LTC) insurance policy include certain consumer protection standards which are in place to ensure that individuals who purchase LTC insurance policies receive a minimum set of benefits and protections. One key standard is that the physical impairment requirement typically must be met with the inability to perform a certain number of Activities of Daily Living (ADLs) often two or more, rather than just one. Another requirement for a tax-qualified policy is that the contract itself has to meet strict guidelines, stating that benefit eligibility can be triggered by a medical necessity, such as a severe cognitive impairment that poses a threat to the individual's health and safety, not just a medical condition that is a matter of convenience or preference. Lastly, to qualify for benefits under the policy, the physical impairment or the loss of ADLs typically needs to be certified by a healthcare professional and is expected to last at least 90 days.