January 6, 2017
I have been helping individuals purchase
long-term care insurance for almost 22 years. Many of my clients are
on claim. The insurance benefits have been invaluable to them and
their families financially, emotionally, physically and socially.
However, by helping them through the claims process, I have
observed firsthand how the extent and acceptance of one’s disability
and the selected policy features impact the ability to receive home
care (HC) benefits.
I would like to share some of these
observations with you so that you can understand the benefit
triggers if you have a policy, and design a better policy if you are
thinking of purchasing coverage.
The need for HC is the No. 1
reason why individuals go on claim. According to claims data, 40
percent of all new claims are for home care.
care insurance — or LTCI — was first introduced, the triggers to
receive HC benefits were the inability to perform two out of six
activities of daily living (ADLs): bathing, dressing, eating,
toileting, continence and transferring; or a cognitive impairment or
a medical necessity. When the policies became tax-qualified, the
medical necessity trigger was eliminated. This meant that
individuals who required assistance due to a medical condition and
were frail, not necessarily disabled, could no longer initiate their
Frailty does not trigger benefits with any LTCI
policy. The only way to receive HC benefits besides having a
cognitive impairment is to be unable to do two out of six ADLs that
require hands-on or stand-by assistance.
Several of my
clients are frail and need help with instrumental activities of
daily living (IADLs) such as laundry, cooking, transportation,
cleaning, etc. In addition, they struggle with their ADLs but are
often too proud and independent to rely on others. Their quality of
life has diminished but not enough for them to reach out for help.
One of my clients is on 24/7 oxygen due to congestive heart
failure and needs hands-on assistance to get out of her chair and
walk as well as to put on her shoes, yet she will not allow herself
to be cared for. She fights the idea of being dependent on others.
She pays out-of-pocket for someone to come in three times per week
to help with her IADLs. Yet, if she were to accept the need for help
with her ADLs, she would receive ample assistance for both her ADLs
and her IADLs, making life much easier for her.
If you have a
LTCI policy, accept the fact that you need help with your ADLs if
you are indeed struggling every day. Don’t deny yourself the
support. Talk to your doctor. Develop a plan of care and file a
claim. You purchased your policy so you and your family would feel
less stressed and more in control. You are not in control when
everything you do is an effort.
If you are thinking of purchasing
LTCI, a policy feature that affects your ability to access HC
benefits is the elimination period (EP). The EP is the amount of
time that you pay out-of-pocket before the policy starts to pay
benefits. EPs can be based on service or calendar days.
your EP is based on service days, for every day you receive HC, you
satisfy one day of credit toward your EP. If you have a calendar day
EP, every day is counted toward the satisfaction of the EP even if
you do not receive care.
Most individuals select a 90- or
100-day EP to save premium dollars. If you are purchasing LTCI to
specifically stay home, satisfying a service day EP can take much
longer if you are not receiving HC every day. When designing a
policy, seriously consider selecting a calendar day EP. I have seen
some of my clients wait upwards of six months to receive policy paid
HC benefits with a service day EP.
Lastly, if you want to
gear a policy towards HC, consider including the first day waiver of
the EP for home care rider. You can still have a 90- or 100-day EP
to keep the premium down for facility care but the rider will give
you access to your HC benefits immediately and for every day you
receive HC, you will get a day of credit toward your facility EP.
For example, if you have a 90-day EP and receive HC for 90 days and
then enter a facility, you will not have to pay anything
As with any insurance, the value and
understanding of the coverage only comes to light when you go on
claim. Purchasing LTCI to protect your family and yourself is a
responsible decision. Knowing the ins and outs of LTCI when an
illness occurs, or when you are designing a policy, puts you in a
better position during the claims process.