You’ve Been Paying Premiums all these Years . . . Now What?

When and How to Use Long-term Care Insurance Benefits

By Laura Chiesman

You have surgery coming up, or maybe it’s becoming clear that one of your parents will need assistance during recovery from an illness, or for a longer period of time. The number of decisions to make involving doctors, care providers, family members and insurance can be overwhelming.

Having a long-term care insurance policy has likely provided a feeling of confidence and security over the years, but times like this tend to raise more questions than answers. You may realize that you don’t really know how long-term care insurance works: When does this policy pay? What will it pay for? Who do you call for help?

Over the last few years, we have had quite a few clients need to use long-term care benefits for themselves or for their parents, and we have helped them answer these very common questions.

The first step is to pull out your long-term care insurance policy and determine a few key facts.

What conditions qualify a patient for benefits?

Your insurance policy outlines benefit triggers that determine the eligibility of a claim. Activities of Daily Living (ADL) are a common benefit trigger. ADLs are the ability to independently eat, bathe, dress, move to and from a bed or chair, use the bathroom and perform basic hygiene. While each policy will have its own specifications, a common trigger is the need for assistance with two or three of these ADLs to be eligible for benefits.

How long do you have to wait to begin receiving benefits?

Policies specify an elimination period that operates much like a deductible, except in terms of time. You must personally pay for the cost of care during the elimination period, after which the insurance coverage will begin. An elimination period is often 30, 60 or 90 days. Depending on your policy, this may not be as expensive as it sounds. Ask lots of questions!

What kind of care or assistance will it cover?

Policy coverages vary and may combine home care by nurses or aides, adult day care, transportation services, a nursing home or assisted living facility.

How much will it pay?

The long-term care policy will spell out specific daily, monthly and/or lifetime coverage limits.

Planning for future events, some which you hope will never happen, is key to your financial security and peace of mind. Handling current and future health care expenses is just one of the important topics, among many, that the FirstWave Financial WealthCoaches consider in formulating financial plans. The FirstWave team is here to help our clients design, implement and update their personal plan as life changes throughout the years.

About the Author:

Laura K. Chiesman, CFP® WealthCoachTM

Certified FinFirsWave Financial Laura Cheismanancial PlannerTM Professional

Financial Planning Association Member

University of Central Florida, BSBA – Finance