How do I receive the most from my long term health care policy at claim time?


Whether you purchased your policy last year or 20 years ago, you want to receive every benefit provided through your contract at claim time. One of my first experiences as an agent was very difficult.  A couple had purchased long-term care insurance approximately two years before the wife was admitted to the hospital with an aneurism.  She came home from the hospital with limited use of her right arm and leg and unable to care for herself independently.  She also required assistance with activities such as bathing, dressing, and eating.  The long-term care policy the couple purchased had a 90-day elimination period.  I clearly remember the day that the husband called me and said, “Babs, I am exhausted and I need help.”  He had assumed, because the ninety day elimination period had passed, that the benefit would now be available and would begin to pay for home care services.  He needed relief from the constant care giving responsibilities. Unfortunately, he had assumed that the 90-day elimination period had passed and that the benefit would now be available and begin to pay for home health services. My heart sank. In most cases, you cannot begin to satisfy the elimination period until you have received services by a qualified provider. In this case, he should have called me when his wife came home from the hospital, so we would have filed the claim at that time and made arrangements for home health services in their home in compliance with the terms of their contract. Depending on the terms of the contract, just one day of services may have been all that was required to receive the benefits at the end of the elimination period.  Their particular contract stipulated that for every one day of services received, seven days could be counted toward satisfying the elimination period.  In this case, he had to wait another 90 days before benefits would be payable. When are benefits payable?  Benefits are payable to policyholders who become chronically ill or disabled after the elimination period of their particular has been satisfied. Most contracts require that you receive services in order to begin satisfying the elimination period. The elimination period may be in ‘service’ days or on ‘calendar’ days.  Consult the Glossary of Terms to learn the difference between ‘service’ days and ‘calendar’ days as they relate to long-term care insurance. Benefits in a long-term care insurance contract are triggered when the insured is unable to perform normal ‘activities of daily living’ (ADLs) such as bathing, dressing, toileting, transferring (i.e. getting from the bed to the chair), continence and eating without substantial assistance from another person. One may also qualify for benefits if he or she but suffers from a severe cognitive impairment such as Alzheimer’s disease or dementia that requires substantial supervision by another person to protect you from hurting yourself or others.  The condition must be expected to last at least ninety days as determined by a licensed practitioner.  Once you qualify for benefits, you should take full advantage of all the policy has to offer.  For example, take advantage of the respite carebenefit that is available each year the policy is in effect.  In some contracts you can have this benefit payable during the elimination period.  This benefit is designed to give the primary caregiver temporary relief from care giving duties. Some long-term care insurance plans include an indemnity rider, which changes the mode of benefit payment from ‘reimbursement of actual expenses’ to ‘payment of the full daily benefit’  regardless of the expenses incurred.  For example, a 60-year-old man who had been in a car accident suffered a head injury that required daily assistance with bathing and dressing. Home care charges were $50 per day, but his daily benefit was $130 per day.  For every day home care services were provided, he netted $80 for other uses related to long- term care needs. By using these services every day, he maximized the money that was transferred from the insurance company to him.  Remember, the insurance company keeps what is left in the plan at the death of the insured unless a ‘return of premium rider’ is purchased. If benefits were needed longer than the benefit period selected, it would be wise to use services on a more limited basis.  In doing this, you will extend your benefit period because the money available through the plan will stay in the plan.  Remember, you want the money purchased through your long-term care insurance plan to work for you.  You don’t want to leave it to the insurance company. If you own a plan that reimburse for actual services received, you still have some control over how long the benefits will be payable based on how often you elect to receive the services (unless you are in a nursing home where services are continual).  If your plan provides for a monthly reimbursement, the insurance company will add the charges incurred during the month and reconcile them against your monthly benefit.  In some cases you may need to pay out-of-pocket to make up for a shortfall, or you may have enough money left over to extend your benefit period. If you own a plan that has a lifetime benefit, make sure you maximized the monthly benefit by taking advantage of every service available in order to spend the full monthly benefit.

“Discussing ling-term care needs with our clients has increased dramatically in recent years.  As a firm, we made the decision that to better serve our clients, we needed to have a strategic alliance with someone who had the heart of a teacher and was independent and truly passionate about helping families protect their long-term care needs.  There was only one choice in our minds, and that was Babs Hart.  In my opinion, she defines the word professional and is the only person we feel comfortable referring our clients to for this important area of their personal financial program.”                                                                                                                     ~William A.B.Dowell (Bill)                                                                   Vision financial Group, Inc., Birmingham, AL