November 18, 2020

Helping Families Understand Long Term Care Insurance

Senior man and daughter talking and laughing near bookshelves
Does your aging loved one have a long-term care insurance (LTCI) policy?

Many times, family members have no idea what the correct answer to this question is. Mom and Dad (or Grandma and Grandpa) might have taken out an LTCI policy years ago without mentioning it. But it’s worth finding out, because LTCI can help your loved ones pay for a range of long-term care services.

What is Long-Term Care insurance?

These policies vary widely, in terms of what types of services they cover. But all of them cover services specific to the long-term care needs of aging adults. Some of the most common services covered by LTCI include assisted living fees and in-home senior care.

A few basic facts about LTCI, in general:

• Each policy is unique to the person, no two policies are alike. This means that the family needs to uncover what their loved one’s unique policy does and does not cover in terms of long-term care services.
• LTCI is more flexible than it once was. Many of the older policies limit covered services because newer offerings were not around when the policy was created. For example, if the policy does not have a home care benefit and the individual wants to remain in their own home, there may be an opportunity to propose an alternate plan of care.
• Regardless of the type of care needed, the individual needs to meet the eligibility criteria before initiating a claim. That is why it is important to gain a clear understanding of the benefit eligibility criteria. Commonly, the insurance carrier will require that the individual needs assistance with at least two of the six Activities of Daily Living (ADL) or require that they need supervision because of cognitive impairment such as Alzheimer’s disease or a related dementia.

It's important to note that every policy is unique – specific to the individual. You’ll need to carefully read over your loved one’s policy to find out what it covers, what’s excluded, and what the coverage limits are.

You also might consider speaking to the agent who sold the policy or to a representative of the insurance provider. They’re the best source of information regarding your loved one’s specific policy.

Questions to Ask the Long-Term Care Insurance Provider

To make the most of your conversation with the insurance agent or provider, prepare your questions in advance. Use this list as a starting point:
• What services are covered?
• How much does the policy pay per day, week or month for each type of service?
• How long will the benefit last?
• Does the policy ever expire? Is there a maximum lifetime benefit?
• Does the policy have a maximum length of coverage period for each service?
• What are the terms of the elimination period? In other words, how many days must I wait before benefits begin for the different types of services? Do I pay for the services out of pocket during the elimination period? Is there a buyout fee for the elimination period?
• How is cognitive impairment such as Alzheimer’s disease or dementia covered?
• Does the policy require an assessment, physician referral, prior hospital stay or other prerequisites for benefits to kick in?

Your local Home Instead office can help you understand how your loved one can access long term care insurance benefits to pay for in-home care.