Making Claims & Using Your Policy
In our first “Step-By-Step” article, we discussed the early stages of acquiring long-term care insurance, including the best age to start shopping for a policy and some important considerations to make regarding costs and budgeting. Then we covered the process of researching carriers, comparing policies, and finally acquiring your own long-term care insurance policy. Here we will walk you through what happens next.
Once you have chosen a policy, been approved, and the policy has been issued, you begin paying premiums. The money paid through these premiums goes towards the benefits that the policy will pay out later in life. There will generally be a gap of many years between the time when you first get your LTC insurance policy and the time when you start receiving benefits. The next step in the process begins when you finally require some form of long-term care.
Step 7: Qualifying to Receive Benefits
Certain conditions must be met before you can start to receive your benefits. These conditions are commonly referred to as benefit triggers. Most companies use the inability to perform specific activities of daily living (ADLs) as benefit triggers. Policies will typically allow you to start receiving benefits once you have issues with two or three of these common ADLs:
- Toileting (getting on or off)
- Maintaining continence
- Getting into or out of bed, chairs, wheelchairs, etc.
Bathing is usually the first area where sick and elderly people run into problems, so while you are still reviewing your policy, make sure that this particular ADL is included. You should also pay attention to what triggers are used in the case of cognitive impairment. This can be a tricky spot because people with Alzheimer’s, dementia, and similar problems can still by physically capable of performing activities but require help or supervision. Mental function tests are commonly used as benefit triggers in cases like these. If you think this may be a cause for concern with your policy, ask whether you need to have someone do things for you rather than just supervise you in order to get your benefits.
Step 8: Making Your First Claim
Once you are in need of care and ready to make a claim, the insurance company will review documents from your doctor and may also send a nurse to perform an in-person evaluation. You must provide a plan of care and have it approved by the insurance company before they will approve your claim. Even after you have met the ADL requirement and all of this is complete, most policies will have you pay for care out-of-pocket for a predetermined period of time. This is called an elimination period.
Elimination periods, as mentioned in one of our previous “Step-by-Step” articles, are the time between the point when you become qualified to receive benefits and the point where your plan actually begins to pay out. It may help to think of the elimination period as a kind of time-based deductible. The exact length of the elimination period varies from policy to policy, but periods of 30, 60, or 90 days are common.
It is worth noting that simply waiting through the elimination period may not be enough in all cases. Some policies also require you to provide proof that you have been receiving paid care throughout that period. Keep an eye out for a requirement like this when shopping for policies, and make sure to keep good records of the care you receive during the elimination period if you do purchase a plan with such a requirement.
After you complete the elimination period, you will start receiving daily benefits up to a certain amount. You will continue receiving these benefits until you have reached the end of your policy and/or received the predetermined maximum amount.