Caregiving Challenges: What to Do with Long Term Care Insurance (LTCI)

So, you find out that your loved one has long term care insurance (LTCI), what does that mean and what does it do?

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Helpful Highlights

  • Long-term care insurance (LTCI) has important financial advantages. Find out if your loved one has a policy.
  • Make sure you connect with someone who can help you understand the details of the policy, as insurance documents can be hard to interpret.
  • Get help with when and how to use LTCI to get the maximum benefits for your loved one. Inquire with advisors, your loved one's healthcare team, and facility administrators (if applicable).

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Bottom line... If your loved one has long term care insurance (LTCI), it will provide some coverage for the costs associated with the extended care required due to aging or a progressing chronic illness.

Best first-step, read the policy

Get a copy of the policy and read through the entire document.

Look for reimbursement rates.

  • Is it per day (example: $120/day)?
  • Is it associated with hours of service provided (example: 4 hours/day up to 20 hours/week)?
  • Is there a lifetime maximum amount? What is it (example: $500,000 max or $1 million max)?

Is there an elimination (waiting) period? (This is an amount of time that must pass after the benefit trigger occurs but before payment for services is started. During this time, you must pay for care until the LTCI kicks in.)

Understand what initiates (triggers) the policy benefits.

  • Normally, the insured person must need assistance with 2 or 3 activities of daily living (ADLs). In most cases, this is determined by RN assessment (who is employed by or contracted with the LTCI company).
  • Does a change in residence to an assisted living facility (ALF) or nursing home qualify? (Sometimes a per day reimbursement will be part of the policy in this circumstance.)

Does the LTCI policy have requirements regarding who can provide care? (Some require care to be provided by a licensed home care agency.)

Will the LTCI policy allow assignment of benefits (AOB)?

  • AOB means the agency is given permission to bill and receive payment directly. Without an AOB in place, you will have to pay for the services, then file a claim for reimbursement.

Contact the insurance company if you have questions.

Key point

If there is a maximum lifetime dollar limit on the policy, try to figure out how long the policy will cover care based on the number of hours of care needed (in other words, how long until the money runs out). This will help you determine when and how to use the benefits. LTCI agents, as well as specialists in aging like geriatric care managers, Certified Life Care Planners, or Certified Senior Advisers (CSA), can help you with this.

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