Nursing Home Insurance. That’s what Long Term Care insurance used to be commonly called. And it made sense. It was insurance that paid for care in a nursing home.
Times changed. More and more people practically shouted that Dorothy had it right in The Wizard of Oz – there’s no place like home.
The insurance companies heard it loud and clear. Policies started covering in-home care. Some policies unfairly pay more if you are relocated to a nursing home rather than receiving care in your home. Others simply look at the level of care received regardless the location.
If you have a loved one with Long Term Care insurance and together you are making decisions about where care will be received, you should know the ins and outs of the policy.
Before I go further I want to be clear. I am neither an insurance agent nor a financial planner. To the contrary, I own an in-home senior care agency. I’ve seen scores of Long Term Care insurance policies and have served a great number of people whose insurance pays for the service. In any event, none of what I offer should be mistakenly taken as insurance or financial advice but only as important information from a knowledgeable service provider.
There are three key components to every Long Term Care insurance policy that could be of great importance to you and are the areas where I receive the most questions. Briefly, these include:
Elimination Period — The “deductible” in a Long Term Care insurance policy is represented by a period of time – an Elimination Period. The time period could be 30 days, 60 days, or 90 days, for instance. Some policies have immediate benefits without Elimination Periods, but you can be assured that you have paid for this through your premium. During the Elimination Period, the insured is responsible for paying for services provided. Once a claim has been established, the clock starts and every day served is counted against the days of your Elimination Period. For simplicity sake, I refer to the Elimination Period as your deductible.
Daily/Weekly or Monthly Benefit — The policy benefit is defined as an amount of money available for approved services. The benefit may be defined by daily, weekly or monthly dollar figures, (e.g., $100/day or $3,500/month). This aspect of the policy is important for budgeting reasons. My recommendation is always to have a Plan of Care tailored, determine what service schedule will fully meet the needs, and then calculate what the charges will be. From that, you can determine what amount will be covered by your policy and what part, if any, exceeds that amount that you will be responsible for paying.
Lifetime Maximum Benefit — The total amount the insurance company will pay is your Lifetime Maximum Benefit. In most every case, there is a limit, but in some cases, there is not. Like you Daily/Weekly or Monthly Benefit, this figure can help determine how long in-home care will be paid.