Long Term Care Q & A

What events will trigger a LTC policy and are the benefit “triggers” clearly spelled out?

For a long-term care policy to be triggered, you must be unable to perform at least two activities from a list of Activities of Daily Living, or ADLs. These activities include things such as bathing, eating, dressing, getting in and out of bed, and toileting.

A benefit “trigger” is the inability of the insured to perform specified Activities of Daily Living (ADLs) such as toileting, bathing, dressing, and eating. Carefully review the policy to see how the benefit triggers and ADL performance are described. You want to see cognitive deficiencies addressed in the policy, the extent required to qualify for triggering, and how they are assessed.

Ideally, you should look for a policy that includes coverage for ADL standby assistance. Also, make sure that pre-existing conditions are covered in the policy.

What is the policy’s waiting period?

This is the time period after the policy triggers have been met but before benefits are paid out. In the example used above, once you can no longer feed and dress, you may have to wait for 30, 60 or 90 days before the daily benefits actually begin, depending on the length of the policy’s waiting period. During this time, you would have to pay for long-term care expenses out of pocket. The waiting period is referred to as the elimination period in the policy.

Does the policy cover homemaker services?

Homemaker services include cooking, shopping, cleaning, and laundry. Not all long-term care policies cover homemaker services, while some require that they be specifically included in a plan of care. Look for a policy that clearly defines homemaker services.

Is the agent or broker a CLTC specialist? And does he or she offer a choice of insurance companies?

You should only work with an agent or broker who is knowledgeable and experienced in long-term care insurance. You can find a Certified in Long-Term Care (CLTC) specialist at https://www.ltc-cltc.com/). Also, look for an agent who represents a number of different insurance companies so you’ll have a wider choice.

What is the policy’s daily benefit amount?

This refers to how much the policy will pay out per day once it becomes effective. Daily benefit amounts typically range from $100 to $300, which is within the cost range of many nursing homes, though some cost more.

Will unused daily benefit amounts carry over?

With some policies, they will. For example, if your daily benefit amount is $200 and your cost on a particular day is $150, the extra $50 would be applied to more expensive days in the future or used to extend coverage time. The added flexibility can be useful, but it will also raise the cost of the policy.

Does the policy have inflation protection?

This is important, because, without inflation protection, your policy may not be very helpful when you need it. Protection can be in the form of simple inflation protection or compounding inflation protection. The latter is more helpful but also more expensive. The percentage of inflation protection will affect the policy’s price, as will your current age and health status. Your goal should be to determine how much coverage you will be getting in the future in inflation-adjusted dollars, not today’s dollars.

Here are some questions to ask before buying a long-term care insurance policy:

Does the policy guarantee that premiums will remain level?

You should be charged the same amount as other policyholders who are the same age. Be aware the LTC premiums can be raised for all policyholders in your age group.

Do the policy cover home healthcare benefits and all levels of nursing home care (skilled, intermediate, and custodial care)?

Determine the benefit amount for each of these types of care, as well as how long benefits will be paid. The policy should cover less-severe conditions while allowing you to receive care in your own home if you prefer.

Is the policy guaranteed renewal?

You should always be able to renew your policy regardless of your health or age if you pay your premiums on time.

Have I shopped around?

Compare benefits among different insurers and don’t buy a policy based simply on price. Ask agents for a detailed description of coverage and a summary of the features of any policy you’re considering.

Is everything I’ve been told in writing?

Make sure that all verbal promises are actually in writing in the long-term care policy.

Does the policy provide death benefits and non-forfeiture benefits?

A policy with death benefits will pay premiums to your estate, fewer benefits you’ve already received. A policy with nonforfeiture benefits will pay some benefits back to you if your policy is canceled for non-payment of premiums.

Does the policy consider mental functions when deciding eligibility?

For example, a person with Alzheimer’s may be physically capable of performing ADLs but might not remember where he or she lives. If mental functioning is not taken into consideration, the person with Alzheimer’s could be denied coverage when he or she needs it.

Does the policy clearly explain claim-filing procedures and your rights to appeal decisions made by the insurer?

It’s critical to understand exactly what you must do from a claim-filing standpoint in order to receive your long-term care benefits when you need them.

Have you answered all medical questions truthfully?

You will be asked detailed medical questions when applying for long-term care insurance, and perhaps also asked for a health statement from your doctor. If the insurer discovers that you were not truthful on your application, your claims could be denied. So be sure to make full disclosures about your medical history on your application and to always be 100 percent truthful.

Who has the final say over whether I qualify for long-term care benefits?

The insurer’s medical professional may be able to overrule what your doctor says about your health condition.

For how long will the policy pay out?

A critical consideration when buying long-term care insurance is the length of time the policy will pay benefits. This can be anywhere from one, two or three years or for the rest of your life. In general, the longer the policy pays benefits, the more expensive it will be.