HRS §431:10H-216
Tax warning for accelerated long-term care benefits
When you apply for a life insurance policy with an accelerated long-term care benefit, or when you ask to receive that benefit, the insurer must tell you that the payment may be taxable and that you should talk to a tax advisor. This warning must be on the first page of the policy and related papers. It does not apply to qualified long-term care insurance contracts.
The statute, as written — Disclosure of tax consequences
With regard to life insurance policies that provide for an accelerated benefit for long-term care, a disclosure is required at the time of application for the policy and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy and any other related documents. This section shall not apply to qualified long-term care insurance contracts.
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