Life · Chapter 6 · Viatical & Life Settlements
Chronically Ill
Definition
Certified by a licensed health care practitioner (within the past 12 months) as either requiring substantial supervision due to severe cognitive impairment, or unable to perform at least 2 of the 6 activities of daily living (ADLs) — eating, toileting, transferring, bathing, dressing, continence — for a period of at least 90 days.
Exam tip
⚠️ Chronic and terminal are NOT taxed the same. A terminally ill viator's proceeds are fully income-tax-free. A chronically ill insured's accelerated/viatical payments are excludable only to the extent they reimburse unreimbursed qualified long-term care services (IRC §101(g)(3)).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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