Long Term Health Care Insurance: What’s to be Included in Coverage?

Long term care health insurance policies can be very confusing and have many different features, options, and benefits that may or may not be something you are interested in. While it’s easy to become confused, you want to make sure that you will have everything that you require should you ever need to use this kind of insurance. If you ever need to draw on your benefits, it will be at a time when you are ill or can no longer care for yourself and you need to understand your policy before this happens. 

It’s absolutely essential that the long term care health insurance policy specifically outlines what benefits you will receive, how much they will be, and when you will receive the payout of the benefits. If this is not clearly stated, you will really have no control once it’s time to receive long term care. To ensure that you receive benefits as soon as you need them, make sure that the elimination period within the policy is as short as possible. This is the period of time that you will be incurring long term care expenses and you will be responsible for all of them. Long term care health insurance does not provide any benefits or coverage during this time. Also be sure that there is only one elimination period within the policy and that once you have cleared it, you will not need to wait again. For instance, if you enter a long term care facility, leave and then need to enter one again, you need to be sure you don’t have a second elimination period. 

Many long term care health insurance companies will provide coverage for a pre-existing condition, that is a condition existing at the time you buy the policy. This is typically only if the condition is not interfering with more than one activity for daily living at the time of application. (NOTE:  Activities for daily living—ADL—include such items as bathing, dressing, feeding oneself and going to the bathroom.) It’s important to disclose any and all conditions to your insurance company when applying for coverage. If the company will not cover a non-debilitating pre-existing condition, you may want to find another company that will. The condition could become worse and you want to make sure that you’re prepared for that. 

A long term care health insurance policy that includes inflation protection is also a good idea because this protection means that your policy increases in benefits paid out as inflation increases. This protection will cost more than a policy without inflation coverage.  

Finally, you want to be sure the policy premiums will cease if/when you enter long term care.  This means you no longer have monthly (or quarterly or annual) payments on the policy, and benefits begin to be paid back to you. 

SCJ recommends the help of an insurance advisor to sort out all the variables when considering purchase of a long-term health care insurance policy.