Long-Term Care Insurance FAQ
By the attorneys of Disability Insurance Law Group
The following information is provided in order to help you understand some of the general concepts and common concerns that arise in relation to long-term care insurance claims. For specific answers from an experienced insurance lawyer, please contact the offices of Disability Insurance Law Group to schedule a free consultation. We serve clients nationwide.
How Do You Define Long-Term Care Insurance?
Long-term care involves personal or medical services that are needed for people unable to care for themselves because of disability, chronic illness, loss of functional capacity or cognitive impairment. The goal of long-term care is to keep a person as independent as possible, by helping the person maintain the ability to function and perform “normal” activities of daily living with assistance. While a younger person may experience a disabling injury or illness that requires long-term care, the most common need for long-term care is for the elderly.
Long-term care includes services such as help with daily activities in your home, like bathing, dressing, eating and cleaning; adult day care and other community programs; nursing home care or care in an assisted living facility, which may include meals, health monitoring and help with daily activities; and visiting nurses or home health care. Long-term care insurance is a type of insurance designed to cover the costs or a portion of the cost related to these types of long-term care services, most of that are not covered by traditional health insurance or Medicare.
Please continue reading for a more in-depth discussion of long-term care insurance. – top –
What Are the Top Ten Conditions That Require Long-Term Care?
According to the National Association for Public Health Statistics, the most common conditions that may cause a person to need long-term care are:
- Fractured bones commonly resulting from a fall
- Recovery from an illness, injury or surgery
- Rehabilitation following a hospital stay
- Alzheimer’s disease and dementia
- Multiple sclerosis (MS)
- Parkinson’s disease
- Heart disease
- Head injury (again, commonly caused by falls)
- Chronic or terminal medical conditions
Of course, there are many more illnesses and injuries that could cause a need for long-term care, but these are the most common. – top –
What Is the Cost of Long-Term Care Insurance?
According to the National Association of Insurance Commissioners, in 2001, the national average cost of nursing home care was $56,000 per year, and for assisted living facility care the cost was reported to be at $22,476 per year and home care costs ranged from $12,000 to $16,000 per year.
Another study found that in August 2005, the average cost for a month in a semiprivate room in a nursing home ranged from a low of $3,000 in Shreveport, Louisiana, to a high of $9,250 in New York City, and that the average monthly base rate for an assisted living facility ranged from $1,650 per month to $4,300 per month. The study also found that the hourly rate for home health care ranged from $12 per hour to $23 per hour. Long-term care costs continue to rise.
It is projected that by 2030, over 23 million Americans will need long-term care, and the average individual long-term care costs will reach $300,000 annually. As long-term care costs skyrocket, so do premiums for long-term care insurance. – top –
Why Pay for Long-Term Care Insurance?
The main reason that people pay the high premiums for long-term care insurance is because the costs of paying for long-term care out of pocket can be even higher. They pay premiums to insure their financial and medical independence. When a claim for long-term care benefits is denied by the insurance company, it can be financially devastating to the both the person requiring long-term care and also his or her family. – top –
What Does My Long-Term Care Insurance Cover?
The types of coverage that a person can purchase under a long-term care policy vary. You can opt to pay for only nursing home care, which is sometimes referred to as a “facility care only” policy. Or, you can opt to purchase coverage for a mixture of care options, including home care and other care, which is sometimes referred to as a “comprehensive” policy.
Some policies will even pay for a family member or friend to care for the insured in his or her home, and may also cover services or devices to support people living at home, such as in-home equipment such as electronic monitoring systems; home modifications, such as grab bars and ramps; transportation to medical appointments; or even training for a friend or relative to learn to provide personal care safely and appropriately.
Your coverage will vary, based upon the policy provisions for which you chose to pay premiums. You may have also purchased additional options, sometimes called riders, to add additional coverage under your policy. These may include a “nonforfeiture benefit” or “inflation protection.” Policies with the “nonforfeiture benefit” will provide that at least some benefits will be paid even if premium payments are not made and the policy is canceled for nonpayment of premiums.
Policies with the “inflation protection” benefit protect again the rising cost of care over time by the amount of insurance coverage increasing as the cost of long-term care increases. What your long-term care insurance policy covers is determined by the contents of your insurance policy, which is considered a contract entered into by you and the insurance company insuring the policy. Our attorneys can help you understand what your policy means for you. – top –
When Will My Benefits Start and What Will My Benefit Be?
What benefits are paid depends upon the policy’s “benefit trigger,” the length of the elimination period that you choose and sometimes when you started receiving paid care. Most policies use activities of daily living and cognitive impairment as “triggers” for benefits. The policy pays benefits when you need help with two or more of the six activities of daily living or you have a cognitive impairment.
The activities of daily living usually include bathing, dressing, walking, moving from bed to chair, toilet, maintaining continence and eating. The cognitive impairment “trigger” is important in cases of Alzheimer’s disease or other illness affecting a person’s mental functioning. Benefits will begin to be paid after you have satisfied your elimination period, if you qualify under the policy provisions.
The elimination period (the amount of time that must elapse after a benefit trigger occurs and before benefits will actually be paid) varies under long-term care policies, and can range from zero to a hundred days. You are not entitled to receive a benefit under your policy until you have satisfied the waiting period. Once you satisfy the elimination period, the type of benefit you will receive also depends on your policy. Most policies provide for either a daily or monthly benefit.
The daily or monthly benefit is the amount of money the insurance company will pay for each day or month that you qualify for benefits under the policy. Most policies reimburse you for the costs you incur for covered services, but some policies also simply pay you a preset cash amount for each day that you meet the “benefit trigger” whether you receive paid long-term care services or not.
If the cost of long-term care exceeds the maximum daily or monthly benefit, the excess is your responsibility. How long you will receive your benefit is determined by the maximum benefit period available under your long-term care policy. You can opt to pay premiums for a shorter or longer benefit period, usually ranging from two to six years, or even through lifetime. – top –
How Can Disability Insurance Law Group Help?
To discuss your particular needs in a free consultation with an experienced long-term care insurance attorney, we invite you to contact our offices today.