Long-Term Care Insurance
Understanding when a policyholder may qualify for benefits — and what happens after eligibility is established.
Long-term care insurance benefits generally become available when a licensed healthcare practitioner certifies that the insured meets the policy’s requirements because of either a loss of functional capacity or a severe cognitive impairment.
Understanding these requirements before care is needed can help families prepare the necessary documentation and begin the claims process promptly.
The insured is generally unable to perform at least two of the six Activities of Daily Living without substantial assistance from another person:
Bathing • Dressing • Eating • Toileting • Transferring • Continence
For a federally tax-qualified policy, a licensed healthcare practitioner must certify that this loss of functional capacity is expected to continue for at least 90 days.
The insured requires substantial supervision to protect against threats to health or safety because of severe cognitive impairment — for example, Alzheimer’s disease or another form of dementia.
A person may qualify under this provision even when still physically capable of performing the Activities of Daily Living.
Meeting a benefit trigger establishes eligibility, but several additional policy requirements may affect when and how benefits are paid.
A licensed healthcare practitioner must certify that the insured meets the policy’s benefit eligibility requirements. For tax-qualified policies, the certification generally must have been made within the preceding 12 months.
The insured will generally need a written plan of care describing the services required and how frequently they should be provided. The plan may need to be prepared or approved by a licensed healthcare practitioner.
Many policies include an elimination period — the number of qualifying days that must be satisfied before benefits become payable. Depending on the contract, the period may be based on calendar days, days on which covered services are received, or separate requirements for home care and facility care.
The care must also satisfy the policy’s definitions of covered services and eligible providers. Coverage may include care received at home, in an assisted living community, in an adult day care program, in a nursing facility, or through hospice or respite-care services.
It functions somewhat like a deductible — measured in time rather than dollars. The individual policy determines its length and method of calculation.
Long-term care services are not limited to nursing-home care and may include assistance provided in several settings.
Long-term care policies are not identical. Definitions and claim requirements may vary significantly, particularly regarding:
The actual insurance contract — not a sales illustration or policy summary — governs the claim.
Families should not wait for a crisis to locate and understand the policy. Before care is needed:
Benefit eligibility, covered services, exclusions, elimination periods, and claim procedures vary by policy. Always review the actual contract and contact the insurance carrier before arranging care based on an expectation of reimbursement.
Long-term care policies can contain definitions and claim requirements that are easily overlooked until care is needed. A personal policy review can help you understand:
Your policy will be reviewed personally by Bert Payne, CPA.
At no cost to you
Request a Policy Review925.708.6501 • withbert.payne@insurance-review-services.com • LTCCPAs.com
Withbert (Bert) W. Payne, CPA, CGMA
Chartered Accountant (England & Wales)
California Insurance License No. 0E90257
For educational purposes only. Not financial, legal, or insurance advice. Policy provisions and tax treatment vary.
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