Sometimes, even the most experienced long term care expert needs to think about the core concept of selling an LTCI policy: helping the client when they need the policy. The following is designed to help clients build a better understanding of this type of coverage. It may seem quite basic to some, but experience has shown that we sometimes forget that the client may have preconceived notions of, or perhaps no real idea about, what the policy is all about. We hope that this will remind us all of the importance of selling a long term care insurance policy.
Congratulations! You have purchased your own long term care insurance policy. We hope this will help you understand how to use the benefits in the future if you ever need help.
LTCI: How does it work?
You have a medical incident that may require long term care, and you own an LTCI policy. What do you need to do? Will this coverage meet your needs? How do you start?
The process begins with a call to the carrier's claim center. Your policy will provide you with this phone number, and either you or someone close to you can make this call. Each carrier processes claims differently; however, they all begin by determining if your condition will qualify you to receive benefits. The crucial first question is: Will your doctor certify that you have a severe cognitive disorder or are unable to perform at least two activities of daily living without assistance, and that he expects this disability to last at least 90 days? Activities of daily living include:
- Eating: Taking nourishment
- Toileting: Performing associated personal hygiene tasks
- Transferring: Moving in and out of a bed, chair, or wheelchair
- Bathing: Washing yourself
- Dressing: Refers to both articles of clothing and assistive devices
- Continence: Control of bowel and bladder functions
Once you have qualified for claim, the carrier will provide a care coordination service to assist you and your family. A care coordinator is a specialist who is familiar with all of the care services you have available, and who will act as your advocate to help you understand the nuances of your care needs. This assigned individual will then develop a written plan of care that best suits you.
More than likely, your policy will have an elimination period, which acts as your deductible. Typically, this means that you'll you need to pay for a certain number of the days during which you receive a qualified service (90 days is very common). Once you have met your deductible, or elimination period, you will begin to receive your claim benefits.
Most of today's policy designs pay out in a reimbursement style, which means that you'll first pay these expenses out of your own pocket, and then submit the proof of services or receipt to the carrier. You will then be reimbursed for some or all the actual charges you have incurred. Many care providers will offer to help with this process and bill the insurance carrier directly, thus eliminating the need for you to pay the bills and get reimbursed later. Your care coordinator can help you understand the process of filing claims.
The most common design is a daily reimbursement, which limits you to a specific amount of money per day that the carrier will pay. Some policies are designed with a monthly benefit provision; monthly reimbursement means that you are limited to a maximum monthly benefit.
The cost of home care may fluctuate every day. Imagine that the maximum daily benefit amount on the policy is $150, and care is received on Mondays, Wednesdays, and Fridays. On each of these days, the care actually costs $200. With a daily design, the carrier will reimburse only $150 for each of those days. With the monthly benefit option, the carrier will reimburse all expenses up to $4,500 per month.
For most contracts, you will continue to be reimbursed for your expenses until you have exhausted your policy's maximum (or specified) benefit. If you purchased an unlimited benefit period, there is no policy maximum and it will never be exhausted.
