What triggers my Long Term Care Policy to begin paying benefits?

Long Term Care Insurance (LTCI) will begin paying a claim when the insured is certified as eligible for care. The general rule is that two activities of daily living (ADL) must require assistance in order for someone to become eligible to go on claim. Often people are certified as eligible for claims while they are still living in their own home with assistance from others, which is one reason the home care component of LTCI is so important to most buyers.

ADLs include the ability to dress oneself, toilet on your own, feeding oneself, transfer oneself, maintain continence, and bathing oneself. These are areas where a certified aid or someone with proper training can easily help make these things possible.  However without help the person in need of assistance will usually slip further away from independence and more towards dependence on others for more things.

A physician is typically involved in the process of certifying that someone needs help with their ADLs.  This is the first step in getting the claim process moving forward.  A formal request to the carrier to go on claim is needed. What that does is get their case/care manager team involved to review the needs both what the physician certified as well as other information about living conditions etc… The care manager has some leeway towards helping with things other than just paying for care to ensure appropriate care is in place.

Once the insurance carrier agrees all triggers are met to go on claim, it will depend if you are on at home or institutional care along with the provision of your insurance contract to determine your elimination period. The elimination period is akin to a deductible for other kinds of insurance but here measures not spent dollars but the number of days care is received or the number of days there was a need for care.  Depending on riders etc. the measures used can differ.

When you set up your policy you will choose an elimination period from zero to one hundred eighty days. The in home care and facility care elimination periods are on a standard basis the same, however virtually all policies are written to include a rider putting the home care elimination period to fewer days or in some cases none. 

Once you are then past the elimination period you will begin receiving benefits based on the actual amount spent on your care. Because you are accessing a pot of money for the care, the longer that you can stretch the care dollars the longer you have help or even total payments made for your care.  Typically each month the insurance company will reimburse for expenses paid, although depending on various circumstances there are more than one option for how the claim benefits can and will be paid out.