How to Understand Your Long-Term Care Insurance Policy
For many individuals and families, interpreting a policy’s language, benefit details, and requirements can feel overwhelming. At LifeWorx, we guide clients through this process every day. Here is a breakdown to help you make sense of your coverage and how to get the most from it.
Step 1: Locate the Declarations Page
Start by finding the declarations page, typically located near the beginning of the policy. This page serves as a benefits summary and includes the following details:
- Daily or monthly benefit amount: The maximum amount your policy will pay for care on a daily or monthly basis.
- Benefit period: The length of time your coverage lasts, such as 2 years, 5 years, or lifetime.
- Elimination period: A waiting period, usually between 30 to 90 days, before benefits begin. During this time, you must pay for care out of pocket; this is commonly referred to as the deductible period.
- Inflation protection: An optional feature that increases your benefit amount annually, usually by 3% to 5%, to help offset rising care costs. We see this in about 8 out of 10 policies.
- Other benefits: Some policies offer additional benefits, such as care management, home modifications, or durable medical equipment coverage. These benefits vary by policy but are commonly seen in traditional or legacy policies.
- Total lifetime benefit: The maximum amount the policy will pay over its lifetime. If you do not have an unlimited policy, this is typically a pool of funds.
We go over each of these numbers with you and explain what they mean, such as how many hours of care you can afford each week and how long your benefits might last. Many clients are surprised by what their policies do or do not cover once we translate the numbers into real-life scenarios.
Step 2: Plan for the Elimination Period
If your policy has a 90-day elimination period, you will be responsible for paying for care during that time. It is important to note that these days must often be “service days,” meaning any day you receive care that is documented and billed on an invoice.
We also review your policy for riders, which are optional additions to a standard insurance policy. Riders allow policyholders to customize their coverage by adding extra protections or benefits that go beyond the original terms of the policy.
For instance, a shared care rider is often available for couples, allowing them to pool their benefits. This means that if one spouse exhausts their coverage, they can access the remaining benefits of the other spouse. Another valuable benefit is the waiver of premium rider, which waives your premium payments while you’re receiving benefits. This provides financial relief during a claim by eliminating your obligation to pay premiums. In our experience, about half of the policies we see include one of these cost-saving features.
In addition to reviewing the policy language, we go a step further. Many times, clients have already received care, such as a hospitalization, rehab stay, or private aide, before contacting us. Our long-term care insurance administrator, Wiktoria Wolfson, collects this information and contacts the LTC insurance provider to determine whether those services can be counted toward the elimination period.
Step 3: Review What Types of Care Are Covered
LTCI policies vary. Some cover home care, others cover only facility-based care, and some include both. Even if home care is listed in your policy, there may be specific requirements, such as using a licensed home care agency rather than a privately hired caregiver.
A lesser-known option is to use your LTC insurance to enhance care in a facility. For instance, if your supplemental insurance pays for a facility stay, your LTC policy might allow you to bring in a caregiver. In these situations, we can provide a licensed LifeWorx caregiver who visits the facility, offering more personalized and consistent care than what is typically available from rotating staff.
As a licensed home care agency that exclusively works with LTC insurance, we are well-versed with the requirements for reimbursement. Our team ensures that all care services meet your policy’s criteria, which helps you avoid common mistakes such as hiring a caregiver who is not covered.
Step 4: Know the Documentation Requirements
LTC insurance companies require accurate and timely documentation to process and approve claims. This usually includes:
- Daily or weekly care logs
- A formal care plan
- Proof of licensure or agency credentials
Submitting incomplete or incorrect documentation is one of the most common reasons claims are delayed or denied.
At LifeWorx, we manage this entire process for you. Our team prepares and submits the necessary paperwork directly to your insurance provider, follows up on claim approvals, and manages communication with the claims department.
Step 5: Understand the “Triggers” for Eligibility
Most policies will not start paying for care until certain conditions are met, which typically fall into two categories:
- Requiring assistance with at least two Activities of Daily Living (ADLs). These include bathing, dressing, toileting, transferring, eating, and managing incontinence.
- A diagnosis of a cognitive impairment, such as Alzheimer’s disease or dementia, by a physician.
We work with your physician or care coordinator to make sure the correct assessments and documentation are submitted. The language must match your policy’s criteria. If not, even a qualified claim could be delayed or denied.
Why Work with a Concierge Agency Like Ours?
We are not a traditional home care agency. Our concierge model is designed for clients with long-term care insurance. That means we focus on more than home care. When you work with us, you’re getting:
- Expert policy review and interpretation
- Hands-on claims management
- Licensed, policy-compliant caregivers
- Customized care plans aligned with your benefits
- Ongoing support from a team that understands LTC insurance inside and out
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