How long-term care insurance claims actually work

What determines if you're entitled to benefits?

LTCI policies differ on how benefits are triggered. So it's important to examine and compare individual policy specifics before purchasing. The following are a few of the most common triggers for benefit eligibility:

• You become unable to perform a certain number of activities of daily living (ADLs) without assistance. These tasks include things like eating, bathing, dressing, continence, toileting (moving on and off the toilet), and transferring (moving in and out of bed). Each policy will define included ADLs, the number you must be unable to perform, and how your policy defines ‘unable to perform’ for each ADL (e.g., does the insurer’s definition require needing someone to physically assist with the activity or simply to supervise the activity?)
• Your doctor has ordered specific care (“Plan of Care”)
• Your care is medically necessary (this is rare with newer policies).
• Your mental or cognitive function is impaired (Dementia, Alzheimer’s)
• You've had a prior hospitalization of at least three days (this is rare with newer policies).

LTCI policies may contain one or more of these provisions. The more specific the language in the provisions, the less room for future disagreements and disputes concerning coverage.

Who decides if you're entitled to benefits?

Just as important as what triggers policy benefits is the question of who decides if you've triggered them.  Insured’s must meet pre-determined requirements as an integral part of any LTC insurance policy claim. The claims administrators are the people whom insurance companies rely on before paying out claims.^{Disclosure 1}

The most desirable policies allow you to qualify for benefits if your own doctor orders specific care in the MD’s Plan of care —rather than requiring you to be examined by an insurance company physician.

When will benefits start?

Most LTCI policies have a waiting period (commonly referred to as the ‘elimination period’) before you can start receiving benefits after you're approved to be benefit eligible. Common waiting periods are 30, 90 days. During any waiting period, you'll be responsible for paying for required care—whether that’s in a nursing facility, an assisted-living facility, or your own home.

Some LTCI policies have no waiting period—you can start receiving benefits on the first day you need care, after you’re approved to be benefit eligible. However, this type of policy tends to be considerably more expensive than a policy with a waiting period. Generally speaking, the longer the waiting period, the less expensive the policy.

Keep in mind that waiting period calculations can vary from insurer to insurer. Some companies may count the days cumulatively (e.g., adding up the total number of days you spend in a nursing home, even with gaps), while others may count the days consecutively (e.g., adding the total number of days you spend in a nursing home without interruption). Also, some insurers require only one waiting period for the life of the policy, while others require a waiting period each time you apply for benefits (unless you become eligible for benefits again within a certain window of time).

The mechanics of filing a claim

Beginning a claim doesn’t have to be difficult. Make sure you review the claim filing process before you ever need benefits. It may be helpful to involve a family member or trusted friend.  Typically, filing a claim will involve submitting a written notice to the insurance company, along with a proof-of-loss form (supplied by the insurance company), and any relevant medical records.  If a claim form didn’t come with your initial policy, you can obtain a form, and any other requirements, by contacting the claims department of the insurance company.

Most policies require you to give written notice of a claim within a specific time after first needing care (e.g., 30 or 60 days). In addition, you may need to verify your condition in writing every 90 to 365 days, depending on the type of claim. To verify your claim, some insurance companies may require you to submit to an independent medical evaluation conducted by a physician of the insurer’s choosing.

You will want to follow the claims instructions.  If you don't, the insurer may deny you benefits if all documentation is not provided.  Sometimes all that is needed to turn a denied claim around is to provide additional required information. In rare occasions your recourse may be to file a complaint with your state insurance department or filing a lawsuit.

If you already have a policy in place, don't let your premium payments go to waste. Take the time now to understand the claims-filing process.

Some carriers offer Claims Care Coordination 

This option can be free or a minimal charge if requested at the time of claim. The services will vary; however, they could reduce the challenges you and your loved ones may face by assisting with things like:

• Determining the long-term care services needed to maintain your independence at home
• Finding appropriate long-term care providers in your community or residential care if necessary
• Reviewing your long-term care insurance benefit eligibility and what’s covered by your policy

Once you have completed the required claims documentation, been deemed benefit eligible, and been approved for benefits, you will start to receive you LTC insurance benefits. It’s time to focus on living the best life you’re able to based on your situation.