March 08, 2020

Helping Families Understand Long Term Care Insurance

Senior man and daughter talking and laughing near bookshelves

Do you have a long-term care insurance (LTCI) policy?

What’s the correct answer to this question? Sometimes it can be tough to tell.  You or a loved one may have taken out an LTCI policy years ago without mentioning it to anyone or giving it much thought. But for older adults and their loved ones, it’s worth finding out, because LTCI can help pay for a range of long-term care services.

What is Long-Term Care insurance? 3 Basic Facts

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 care. Below are three basic facts about LTCI.

1. Each policy is unique to the person, no two policies are alike. This means that you need to uncover what a unique policy does and does not cover in terms of long-term care services.

2. 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 older adult wants to remain in their own home, there may be an opportunity to propose an alternate plan of care.

3. Regardless of the type of care needed, the individual needs to meet the eligibility criteria before initiating a claim. It is important to have 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) – bathing, dressing, toileting, transferring(moving to and from a bed or a chair), eating, and continence – or require that they need supervision because of cognitive impairment such as Alzheimer’s disease or another form of dementia.

It's important to note that every policy is unique – specific to the individual for what it covers, what’s excluded, and coverage limits.

Speaking to the agent who sold the policy or to a representative of the insurance provider is a great way to be sure you fully understand the specifics of the LTCI policy.

Key Questions to Ask the LTCI Provider

These questions can help make the most of a conversation with the insurance agent or provider:

  1. What services are covered?
  2. How much does the policy pay per day, week or month for each type of service?
  3. How long will the benefit last?
  4. Does the policy ever expire? Is there a maximum lifetime benefit?
  5. Does the policy have a maximum length of coverage period for each service?
  6. 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?
  7. Do I pay for the services out of pocket during the elimination period?
  8. Is there a buyout fee for the elimination period?
  9. How is cognitive impairment such as Alzheimer’s disease or another form of dementia covered?
  10. Does the policy require an assessment or physician referral, prior to a hospital stay, or other prerequisites for benefits to kick in?

Comprehensive LTCI Resources

For more information on long-term care insurance, review our comprehensive guide, which provides an overview of LTCI. The guide helps to better understand policy benefits, helps to determine care needs and provides tips to initiate a claim. It is also packed with resources for family members and care partners to help manage the stressors of caregiving and ways caregivers can start planning for successful aging.

For additional financial resources, see our Home Care Funding Solutions Guide to help families navigate payment options for care. For those caring for someone living with dementia, financial support via the Dementia Home Care Grant may also be available to help cover the costs of in-home care.

Personalized Senior Care

From respite care to 24-hour in-home care, at Home Instead, care plans and services can be tailored to meet your family’s needs.
Senior talking with caregiver