Your aging or ill loved one is requiring an increased level of care either at home or in a facility. You suspect they have a long-term care insurance policy, but now what?
First, start by looking for their policy or any records of premium payments. If you find evidence of a long-term care insurance policy, call the agent or insurance company listed on the documents to see if the policy is still in-force. If it is, find out all the specifics of their coverage.
Ask the agent or insurance company the following 10 questions:
1. What are the benefit triggers?
Most policies will require that the policyholder need assistance with at least 2 activities of daily living (transferring, toileting, bathing, dressing, eating, and continence) or a cognitive impairment. Ask if stand-by assistance is sufficient or if they require actual hands-on assistance with ADLs.
2. How much is the benefit and is it a daily or monthly benefit?
If it’s a daily benefit such as $100/day, keep in mind if there are services over $100/ day, they will not be covered. If possible, you might try and spread out services each day so you don’t go over the daily limit. If it’s a monthly benefit, you have more flexibility and don’t need to be concerned with spreading out the services.
3. How long will benefits last?
Will they last for 2 years, 5 years, or lifetime? Is it based on a maximum total dollar amount?
4. What type of policy is it?
Reimbursement – you need to submit receipts
Indemnity – you receive cash without having to submit receipts.
Most policies issued today are reimbursement, although if it’s an older plan it may be indemnity.
5. How are you paid?
Is it direct pay where they directly pay the care provider or do they pay you and then you pay the provider?
6. What’s the elimination period (waiting period)?
This is the amount of time you have to wait before insurance pays benefits. A typical elimination period is 90 days. Ask them if it’s based on service days or calendar days.
7. Are there different limits based on location of care like home care vs. facility care?
Most policies issued today are comprehensive and offer the same amount of care for any location, but some older policies may have different limits. For instance, facility care might be $150/day vs. home care might be $100/day.
8. Is there a waiver of premium?
Many policies have a waiver of premium so that once a claim is filed and approved, premiums no longer need to be paid.
9. Is there a death benefit?
A death benefit is a lump-sum payment to a policyholder’s chosen beneficiary. Combination hybrid long-term care insurance policies with death benefits have only become popular in recent years, so if a policy was purchased some time ago, it probably does not have this feature.
10. Are there policy exclusions?
Most policies won’t cover care needs that result from self-inflicted injuries, drug and alcohol abuse, and mental health disorders.
If you’re helping a loved one now and you haven’t filed a claim, take notes on how you’re helping them.
How long are you helping them each day?
Are you helping with meal prep, transferring, dressing, and bathing?
If it’s a cognitive situation, track their behavior – how does it change throughout the day?
People with cognitive impairments may experience sun-downing where they may be better in the morning than in afternoon and evening. When a case manager or nurse comes out to evaluate your loved one to see the severity of their condition, you want to make sure you schedule the time for when they’re behavior changes- whether that be in the afternoon or evening.
Track their sleep patterns- when are they sleeping and what are they doing when they’re up?
Track days of care services are provided (important if you have a service day elimination period). After your policy is “turned on,” the agency or care provider will track the care and you won’t need to.
Family plays a huge rule with the insurance company when there’s a cognitive impairment.
The Bottom Line
You want to be prepared and have all the appropriate information before you file a claim. Once you have all this information, you and your family can make an informed decision about when to file a claim and care options.