If an Individual Receives Benefits from a "Qualified" Long-Term Care

If an individual receives benefits from a "qualified" long-term care insurance policy, how are these benefits treated in terms of taxation?

A) All benefits are considered to be ordinary income and are taxed as such
B) All benefits that are received must be adjusted against the total amount of premium that the insured paid in to the policy
C) Only the amount of benefits that exceed 7.5 percent of the insured's gross income may be deducted
D) All benefits received are treated as reimbursement for expenses that are incurred for the insured's medical care and are therefore not considered as part of taxable gross income (subject to a per diem dollar amount)