Using long-term care insurance

Your relative may have bought long-term care insurance to cover the expense of care when help is needed. Activating the policy takes some lead time. It’s wise to learn all the steps and definitions so you can be strategic with your timing.

Types of care covered. Read the policy and see what kinds of care it will pay for. Options may include nursing homes, assisted living facilities, or private care at home. Check for exclusions.

“Elimination period.” Time is money in long-term care, literally. Think of this as a deductible measured in time. Check to see if the policy requires that you pay out of pocket for care for the first 30-120 days AFTER you have initiated the claim.

“Benefit trigger.” To open a claim, you must prove the need for assistance with personal care tasks: bathing, dressing, using the toilet, eating, or walking. In the case of dementia, such as Alzheimer’s, testing will be needed to prove the degree of memory loss.

Length of the benefit. Most policies have a three-year or five-year limit. Be cautious about starting your loved one’s policy too early. If your relative has dementia or any type of very long-lasting illness, you may want to delay opening a claim until he or she is quite impaired. (But don’t wait too long!)

The claims process. Each company is different, but the process starts with a “claims packet” that includes

  • claim forms. This is a statement of needs and permission to obtain information from providers;
  • physician’s statement. This is a critical document in which the primary care doctor certifies your relative cannot perform personal care tasks;
  • nursing assessment and plan of care. This is usually completed by a nurse from the company providing care;
  • provider statement. The home care agency or facility you choose must meet the policy’s criteria for payment.