Long Term Care Insurance — It’s All about the Contract

If you purchased a long-term care insurance policy, (LTCI) make sure you keep that contract and the annual update notices in a safe, accessible  place and that you let your important persons know where they can find these papers. When it comes time that hands-on care, supervision and cueing are required, it will be necessary to scrutinize the contract to see just what conditions must be met to trigger the policy benefits. A Claim will have to be submitted with copious written proofs. medical records and opinions. No one has a crystal ball, but the stronger the evidence at the time the claim is submitted, the greater the likelihood that the claim will be approved so that benefits can start to flow.

A policy may say that the contract holder must require “substantial assistance in three or more of the Activities of Daily Living,” or perhaps two, or even four. The ADL’s are dressing/grooming, feeding, toileting, transfers/ambulation [with or without assistive devices], bathing, and continence. The policy holder’s needs could be the result of physical disability, or could be the result of severe cognitive impairment due to Alzheimers disease, Parkinsons disease or other dementias. Some policies cover in-home care; others only cover care in a skilled nursing facility (nursing home). The daily benefit is usually different depending on the setting. Some contracts require that in-home caregivers be licensed; others do not have that requirement. The length of the policy benefit is spelled out in the contract — five years? Lifetime? Only until a certain pool of benefit dollars is used up?

After the claim is filed, you can expect the insurance company to send out someone who will perform a functional assessment to see whether the criteria are met. As we have discussed in this space on the subject of applying for Medicaid (the PAS clinical screening) or arranging for in-home care services after Medicaid eligibility has been approved (interaction with the Case Manager from the Medicaid Managed Care Organization), self-advocacy and knowledge of the applicable standards are vital.

There is typically an elimination period such as sixty or ninety days once the claim is approved. Some policies then pay the benefit to the individual as a reimbursement, only after receiving additional proof each month that care was paid for in the prior month. This may require cooperation from the care provider, such as the nursing home or the assisted living facility or home care agency. Sometimes benefits can be assigned — some companies will pay the benefit to the facility or agency after receipt of a properly signed Assignment of Benefits. Other policies may just start paying benefits monthly after the benefits begin.

It’s all about the contract. The contract itself and information about the policy should be kept with your other important financial documents such as your power of attorney and list of assets, so that if the need arises, and your trusted person knows how to start.

For advice on elder care planning involving long-term care insurance benefits, and advice on claims issues, call us at ………. 732-382-6070

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