Long Term Care Insurance Benefits - How to Understand and Utilize Yours

Long term care insurance benefits can vastly increase the amount of long term care you can afford, so be sure to understand and utilize them! This article will give you tips to get you started.

Understanding the Benefits in Your Particular Policy

Read your long term care insurance policy carefully. There are many different types of policies and many options are available, so be sure you know exactly what your particular policy covers. Also, consult your insurance advisor to explain any technical terms, answer your questions, and give you advice about the best way to utilize your benefits.

If your long term care provider has offered to file claims for you, be sure you understand your benefits and the filling process, in case your provider doesn’t.

The National Association of Insurance Commissions publishes a handy guide called A Shopper’s Guide to Long Term Care Insurance, which you can download at this link from the NAIC website. The remainder of this article is based on that guide; we recommend you also consult the guide directly.

Know How Your Benefits Are Paid

Policies using the “expense-incurred” method reimburse you for the cost of covered services, up to a maximum.
“Indemnity” policies pay a set dollar amount once eligibility is established and when services are being received.
Policies using the “disability” method pay a specified benefit once eligibility criteria are met, even if no services are received.

Some policies also provide “pooled” benefits (also called “joint benefits”) that are shared between related adults.

Know What Services are Covered

Covered services vary by policy, so be clear about what your policy covers typical options include:

Residential care in a nursing home or assisted living community
Care at home, potentially including home health care, personal care, or homemaker services
Care in an adult day center or other community care
Hospice care
Other ancillary services

Know the Requirements that Service Providers Must Meet

Some policies only cover care in certain types of facilities
Some policies require home care to be provided by licensed agencies; others have provisions to cover services given by private caregivers

Know Where Services are Covered

Some policies only cover services provided in certain geographical areas. Most policies issued in the United States do not provide coverage outside the United States.

Know What Services Are Not Covered

Be clear on what particular services your policy doesn’t cover. These exclusions will be listed in the policy.

Know How Much Coverage You Have

Policies normally pay benefits by the day, week, or month. Some policies pay one time for single events.

Most policies limit the total benefit amount that they will pay over the life of the policy. Some policies state the maximum benefit it terms of a time period such as year; others will specify a maximum dollar amount paid.

Some policies will include inflation adjustments which increase the benefits for inflation. Some of these policies include automatic inflation adjustments, either using simple or compounded adjustments. Others offer non-automatic offers to increase benefits, usually accompanied by a change in premium.

Know How You Become Eligible for Benefits

You become eligible to receive benefits under your policy when you meet the requirements of the “benefit triggers” in your policy. Typical benefit triggers include the following, but your policy will be specific about its benefit triggers:

Being unable to do activities of daily living, or ADLs, such as bathing, continence, dressing, eating, toileting,and transferring. Typically, a policy pays benefits when you can’t do a certain number of the ADLs, such as two of the six or three of the six. Some policies say that you must need someone to actually help you do the activities. That’s known as hands-on assistance. Others say you qualify if you only need someone nearby to help you if you need it (stand-by assistance).
Cognitive impairment (may require a medical diagnosis)
Doctor certification of medical necessity
Prior hospitalization

Know When Benefits Begin

Many policies don’t pay benefits right away - they have an elimination period, deductible, or waiting period. Elimination periods for different services may be different even when covered within the same policy. Some elimination periods are stated in terms of calendar days; others are stated in terms of service days. Some require measurement in consecutive days; others allow non-consecutive days. Some policies require you to meet the elimination period only once in your lifetime. Others have a new elimination period for each episode of care.

Be Aware of Other Aspects of Your Policy

Determine if your policy includes:

Waiver of premium, which allows you to stop paying premiums once you begin receiving benefits
Premium refund at death
Downgrades - reducing coverage as a way to reduce premiums if you can no longer afford them, to avoid cancelling the policy entirely. This option may not be listed in your policy, so inquire about it if you can no longer afford the premiums
Nonforfeiture benefits - benefits available if you drop your coverage or it lapses

Tips from Care is There

Planning Care Based on Your Long Term Care Insurance Benefits

As you make your plan for long term care, consider the type of coverage provided in your policy. The article at this link will show you how to make your plan.

Be Sure Your Loved Ones and Advisors Are Aware of Your Policy

Your benefits may become necessary due to a sudden accident or illness or due to increasing cognitive impairment. Therefore, be sure your loved ones and trusted advisors are aware of your policy and have a copy of it. This includes your agents under health care power of attorney and general (financial) power of attorney, your financial advisors, and loved ones who may feel responsible for caring for you. Your insurance company may not be willing to speak with anyone about your benefits unless they can prove they are your agent under power of attorney or unless you give specific permission.

In addition, it is helpful to tell the insurance company who to contact if your coverage is about to end because you forgot to pay the premium. This is often called “third party notice.”

Know How to File a Claim

The insurance company will have specific requirements for how claims are filed. Contact your insurance company or your insurance advisor to learn the process and obtain the proper forms.

It’s a good idea to keep a log of your conversations and contacts with the insurance company and keep all the claim paperwork, in case there is a dispute later.

Be Present with Your Loved One During Needs Assessments Conducted by the Insurance Company

The insurance company will probably have a nurse or other professional assess your loved one’s needs to determine if they meet the policy’s benefit triggers - both when the initial claim is filed and periodically thereafter.

We recommend that you or your care manager be present with your loved one to ensure the assessment is accurate. Often, potential beneficiaries will overstate their abilities out of pride or out of unrealistic beliefs in their current capabilities, which could cause coverage to be incorrectly denied.

Get Help When You Need It

Filing long term care insurance claims can sometimes be complicated. Consult your insurance professional. Also, you can hire long term care insurance claims specialists to process claims on your behalf and to help you dispute claims that are denied.

How Care is There Can Help

Need help utilizing your long term care insurance benefits? Care is There can:

Work with you, your insurance advisor, and your insurance company to understand your benefits
Help you create a plan for your long term care, utilizing the knowledge about your insurance benefits, and help you put that plan in place
Help you choose service providers that are covered under your policy, and identify ones that aren’t
Help you gather information, fill out insurance paperwork, and file claims with the insurance company
Be present with your loved one during insurance company assessments, to ensure the assessor understands your loved one’s needs
Connect you with insurance professionals and specialists

Next Steps

Contact Care is There today for a free consultation!

Charlottesville Area: 434.326.5323
Shenandoah Valley: 540. 246.0211
Toll Free: 800.434.1633
Email: Info@CareisThere.com

Long Term Care Insurance Benefits – How to Understand and Utilize Yours