Over the past several decades, advances in health care, hygiene, nutrition, and other factors have helped increase life expectancy. But with longer lifespans also comes a greater need for assisted living facilities, nursing homes, and other long-term care options for seniors.
Roughly half of all adults will need long-term care at some point in their lives. That includes roughly 2 out of 3 seniors who are currently 65 or older, according to the Administration for Community Living.
One way to help prepare for this possibility is by purchasing long-term care insurance, usually as a component of a broader life insurance policy. However, it’s important to understand that the actual coverage provided by long-term care insurance can vary significantly depending on the insurance company and policy you choose.
In this blog post, we’ll take a closer look at what long-term care insurance typically covers, how to determine whether you should purchase coverage, and potential challenges or pitfalls you might encounter.
Typical Coverage Provided by Long-Term Care Insurance
In general, long-term care insurance is meant to cover long-term care expenses that would not typically be covered already by Medicare, private health insurance, or disability insurance. The focus here is on costs associated with custodial and personal care of an individual, rather than medical care.
For example, your plan might cover:
- Nursing home care. This covers the cost of care in a nursing home facility. Policies often pay a set dollar amount per day toward nursing home costs.
- Assisted living facility care. This covers care received in residential care facilities, which provide help with daily living activities like bathing, dressing, and eating.
- Home health care. This pays for care provided in your home by licensed care professionals like nurses, therapists, or aides. It covers services like nursing care, physical therapy, occupational therapy, and speech therapy.
- Respite care. This provides short-term relief for unpaid family caregivers by paying for someone to come to the home or for the patient to stay in a facility temporarily.
- Adult day care center. This covers the cost of adult day care centers that provide supervision and care during the day.
- Hospice care. Terminally ill adults nearing the end of life may choose hospice care services, which focus on easing painful symptoms, prioritizing physical and emotional needs, and maintaining the highest possible comfort and quality of life (without attempting to prolong life).
- Additional services. Some policies may cover other medical or personal care services like medical equipment, home modifications, transportation, and caregiver training.
Before You Buy Coverage: Read the Fine Print
As noted above, the specific coverage provided by long-term care insurance can vary widely from policy to policy. For example, many insurance company policies reimburse a subset of qualified long-term care expenses. However, not all the above services are covered. Furthermore, there may be a daily maximum or lifetime maximum amount you can receive.
Long-term care insurance policies are also heavily regulated by states. The rules in place for plans in Illinois may be very different than other states.
In short: if you’re considering buying long-term care insurance, or you or a loved one already has a policy, do not make assumptions about what it entails. Always read it carefully beforehand. Suddenly realizing you don’t know how you’re going to pay for your or a loved one’s personal care during an extended illness or at the end of life is a devastating experience no one should have to go through.
Qualifying for Benefits
Before you or your family member can start to receive benefits, you must meet the “benefit trigger” criteria as defined by the policy. Then you’ll need to wait until the elimination period has expired.
Benefit trigger criteria can vary from policy to policy, but in many cases you will have to show that you or your loved one is unable to independently perform at least 2 of the 6 activities of daily living:
- Bathing
- Dressing
- Eating
- Transferring
- Toileting
- Continence
The policy may require you to have a nurse or doctor certify that you meet the trigger criteria in a detailed “Plan of Care”.
Once the policy has been triggered, the elimination period begins. Depending on your policy, you might have to wait up to 90 days (or more) to begin receiving benefits.
Again, remember that policies can vary significantly, so be sure to read yours carefully. The above information might not be accurate for your situation.
Common Exclusions
Almost every long-term care insurance policy will include a list of exclusions. Again, it’s critical to read your policy carefully to see what it will (and won’t) cover.
Common exclusions include:
- Pre-existing conditions. If you have a previously existing medical condition at the time the policy went into effect, your long-term care policy may not cover expenses related to that condition unless a certain amount of time has passed, often 6 or 12 months after the policy starts.
- Mental health conditions. Unfortunately, many policies limit or exclude benefits for depression, anxiety, schizophrenia, or other mental health issues.
- Self-inflicted injuries. Injuries caused by intentional self-harm, and often substance abuse or drug addiction, may be excluded.
- Certain types of facilities or care. Some policies only cover nursing home care, but not assisted living. Others might cover both, but not home health services or informal care provided by family members. Often, care facilities will need to meet certain licensing standards to qualify.
- A family member may be excluded from providing reimbursable in-home support.
- Geography. Benefits might only be available in certain states or regions.
RELATED POST: Why Was My Loved One’s Long-Term Care Insurance Claim Denied? – Bryant Legal Group (bryantlg.com)
Long-Term Care Insurance vs Long-Term Disability Insurance
One question we often receive regards the difference between these two types of insurance policies and whether both are truly necessary. While both forms of insurance can help provide for people unable to work or care for themselves, each type of policy covers different things.
Long-term care insurance, as noted above, is meant to provide reimbursement for specific expenses related to daily living activities (as opposed to medical costs) that would not typically be covered by health insurance. Long-term disability insurance, on the other hand, provides a regular monthly benefit intended to replace lost income from being unable to work.
In most cases, good long-term disability insurance should be considered essential for any working adult, particularly those who have several working years left or work in a high-income field. Adding a long-term care policy to your benefit portfolio can provide additional coverage and security. If you can only afford one type of policy, you generally shouldn’t choose long-term care insurance over disability insurance unless you’re confident you already have enough retirement savings to cover regular living expenses for the rest of your life.
RELATED POST: Long-Term Care vs. Long-Term Disability Insurance – Bryant Legal Group (bryantlg.com)
Need Help with Your Long-Term Care Claim? Contact Bryant Legal Group
Long-term care insurance can be a crucial lifeline for those struggling to care for themselves due to illness, injury, or age-related decline. However, in practice, obtaining the benefits you paid for can be extremely challenging.
Long-term care claims are extremely expensive for insurance companies. Because they underestimated the amount of care that would be needed, policies sold in the 1980s and ‘90s especially have been unprofitable for insurers. They are highly motivated to deny claims as much as possible. That has been devastating for families who have faithfully paid premiums for decades and now require that coverage.
If you’ve been denied coverage for a long-term care claim, we strongly urge you to contact an experienced long-term care insurance attorney. These policies are complex, and an attorney can help you understand what’s in your policy, document your care needs, and help you build a successful claim or appeal.
To schedule a free consultation with the attorneys at Bryant Legal Group, give us a call today at (312) 561-3010 or complete our simple contact form.