No matter who you are, there is a very real chance you could someday lose your ability to work or care for yourself due to a disability or age. That’s why having a safety net for you and your loved ones is vital—and why understanding what plan fits your needs can be stressful.
A long-term care or long-term disability policy can help you protect your health and financial future and reduce the strain on loved ones. But how do you know which one is right for you, as well as when you can use it?
By hiring an experienced disability attorney, you can get unbiased, informed advice to help you make the right decision for your needs. At Bryant Legal Group, our legal team understands the ins and outs of the disability insurance industry, and we are ready to use our knowledge to help you.
In this article, we will cover the basics of long-term care and long-term disability insurance, including what benefits are covered, how to qualify, and how to tell which kind of policy is right for you.
What are Long-Term Care and Long-Term Disability Insurance?
Although they sound similar, long-term care and long-term disability are two types of insurance policies that provide very different benefits. Some policyholders may have needs that apply to one, but not the other, and some policyholders may find benefits in both. However, it is important to know what each of these policies do before signing up for one or the other.
If you are unsure about what long-term disability or care insurances are, consider the following and don’t be afraid ask questions to an experienced disability attorney if you need help.
Long-Term Care Insurance
Long-term care insurance is a policy designed to help take care of expenses related to care you or a loved one may need when you are unable to care for yourself.
These insurance policies typically cover daily care needs and services that would not normally be covered under medical insurance, such as skilled at-home nursing care, assistance with routine activities, or the cost of receiving care at a nursing home or assisted living facility. Long-term care insurance can provide peace of mind to policyholders and their loved ones through monthly benefit payments.
Older people are not the only ones who might need a long-term care policy. Any person who is no longer able to care for themselves may benefit. However, these policies vary and can be expensive, depending on factors such as your age, health status, and the insurance company. So, it is important to assess your options carefully before purchasing a policy.
LTC policies can also vary in coverage, with some having extensive coverage and others having strict limits. It is important to consider your own circumstances, and, if you’re still unsure, consult with an experienced disability lawyer before making a final decision.
Long-Term Disability Insurance
Long-term disability insurance does not directly cover care. Instead, long-term disability covers a portion of your lost income due to a disability. It is meant to provide some financial security in the case of an accident, but do not protect you from increased medical costs associated with your age or disability.
These policies vary in benefits amount, qualification types, elimination period, and cost depending on where and when you get them, which makes it important to make sure you get the right policy for your needs. LTD policies are often provided through work as a group, or ERISA, policy, but may not provide the best coverage, even if they are no cost to you.
Long-term disability insurance can be extremely beneficial for those working in specialized or high-paying fields, as it allows them to maintain a level of income comparable to their pre-disability earnings in case an accident takes away their ability to work.
When Do I Qualify for a LTC or LTD Claim?
Long-term care and long-term disability benefits are not always easy to claim successfully, as they both require you to meet specific conditions.
Qualifying for Long-Term Care Benefits
To receive long-term care benefits, you must be unable to perform two of the six “activities of daily living” considered necessary to care for yourself. These activities include:
- Eating
- Bathing
- Dressing
- Transferring (getting out of bed, getting out of the bath, etc.)
- Ability to use a toilet
- Cognitive awareness
Once you make a claim, the insurance company will usually want to review any relevant medical records from your doctor, and may request a nursing evaluation. If they agree that you are unable to perform at least two activities of daily living, you will likely qualify for long-term care benefits.
That said, your insurance policy may include an elimination period of up to 90 days before reimbursement begins. Until you reach this elimination period, you’ll need to pay for your own care out of pocket.
Qualifying for Long-Term Disability Benefits
To receive long-term disability benefits, your disability must meet your policy’s definition of disability. The main definitions of disability are:
- Own Occupation: You must be unable to perform the job listed as your occupation on your disability policy.
- Any Occupation: You must be unable to work any job to which you are “reasonably suited,” regardless of job difficulty, industry, or expertise.
Any occupation policies tend to be less expensive but are much stricter when it comes to receiving benefits. Your benefits may be denied if you’re able to work in another job or industry, even one that is lower paying or less fulfilling for you. Own occupation policies are more expensive, but are much easier to qualify for, and sometimes allow you to continue working in a different field without losing your benefits.
Unfortunately, many disability polices will begin as an own occupation definition and will switch to an any occupation definition after 24 months, causing policyholders to potentially lose their benefits. It is important to carefully look over your disability policy options, especially if you are offered a plan through your employer. These policies may offer savings now, but will leave you without the coverage you need and make filing an appeal more difficult down the line.
Which is Right for Me? A Few Key Differences
Long-term care insurance and long-term disability are not mutually exclusive, and it often makes sense to purchase both. However, if you can only afford the premiums for one or the other, it’s important to carefully consider which one makes more sense for your expected needs.
For example, if you are looking to cover the potential costs of a live-in nurse or nursing home, these will not be covered under long-term disability and will come entirely out of pocket. However, if you are injured and unable to work, but still able to care for yourself, the financial security of LTD may be more beneficial to you.
Generally speaking, people who still have several working years left, work in a high-income occupation, or haven’t yet saved enough for retirement should not go without long-term disability insurance. However, if you feel that you’ve already put enough away in savings to cover your living expenses but are concerned about future long-term care costs, purchasing long-term care insurance instead might make a lot of sense.
To recap, here are some of the key differences between long-term care and long-term disability insurance:
- Benefits: Long-term care insurance reimburses you for out-of-pocket expenses, while long-term disability pays a portion of your pre-disability income as a regular benefit.
- Benefit period: Long-term care benefits can be received at any age, while long-term disability typically stops benefits at 65, or normal retirement age
- Provider Options: Employers do not typically provide long-term care, which can be expensive compared to long-term disability. However, many employees should consider private disability insurance as well, considering the lack of benefits in many group policies for specialized industries.
Even though long-term care premiums can be expensive, they are still significantly less than the cost of long-term care itself. The average cost of a nursing home, assisted living facility, or health care services is significantly more than the average cost of long-term care insurance.
However, this cost is not for everyone and may outweigh the benefits depending on your circumstances. This makes getting an informed opinion from an experienced attorney especially valuable before making a decision.
How an Experienced Disability Attorney Can Help You
If you are still unsure about which policy is right for you, consult a disability attorney about your options. Disability attorneys will help you to understand each policy’s benefits, policy limits, deductibles and fees, term lengths, waiting period, and benefit qualifications.
Disability policies can be complicated and are often contain traps that prevent policyholders from getting the benefits they deserve. So, it is valuable to get an attorney who can help you understand the details of each option. An attorney can also help you figure out if you would truly benefit from a long-term care policy, and if the care in your policy of choice is adequate or not.
When it comes time to file a claim, having a disability attorney at your side can help ensure your claim is filed correctly and successfully. If your claim is wrongfully denied, your attorney will communicate with the insurance company on your behalf and can even file a lawsuit if they refuse to fairly compensate you and your loved ones.
Bryant Legal Group:
Chicago Disability Attorneys Ready to Answer Your LTD and LTC Claim Questions
At Bryant Legal Group, we know that your future is worth protecting, which is why our experienced disability attorneys are available to help you make the insurance decision that’s right for your needs. Our team has experience working with insurance companies and are here to help you avoid potential pitfalls in the filing process, as well as to fight back on your behalf if your claim is unfairly denied.
If you or a loved one are considering signing up for long-term care or long-term disability benefits, but are unsure what to do next, call Bryant Legal Group at (312) 561-3010 or contact us to schedule a free consultation with one of our disability experts.