Understanding Your Long Term Care Insurance Benefits, Part 9: Commonly Used Terms

Author: Jonathan Marsh

This video aims to go over some commonly used terms that you want to be aware of when discussing your long-term care insurance policy.

This video is part 9 of a video series created to help individuals obtain a better understanding of Long-Term Care Insurance. More specifically, what Long-Term Care is, who needs Long-Term Care, what the types of Long-Term Care are, what Long-Term Care Insurance covers, Considerations, and whether or not someone can still purchase long-term care insurance.

The entire video series can be found here on our YouTube channel: https://www.youtube.com/watch?v=dAfGKsKQIS4&list=PL8BRKF6RZne9Bi3nhipkU9Iq1YRQ57EJT&index=1


This slide shows some commonly used terms when discussing long-term care insurance policies.

As we have discussed previously, the Activities of Daily Living, or ADLs, are those basic actions that independently functioning individuals perform on a daily basis.

The elimination period, also known as the deductible period or benefit waiting period, is a specified amount of time at the beginning of a disability during which you receive coverage services, but the policy does not pay benefits.

Here's an important tip, you may be able to leverage recent hospitalizations, recent rehab stays, or recent in-home care services to provide evidence to the insurance company in efforts to reduce the elimination period, thus saving you money. In other words, for example, if you had a 90-day elimination period and can provide evidence that there were 30 days in a rehab facility in the last year, the insurance provider may reduce your elimination period based on those 30 days of service.

In addition, you want to make sure you understand if the elimination period is based on service days or calendar days, both of which are very different. Let's take, for example, a 90-day elimination period. Calendar days are going to be better because you can literally mark your calendar for 90 days out from the day you are eligible for benefits, and that is the day your benefit payments will start. Service days, on the other hand, require that you receive long-term care services for an actual 90 days. For example, and let's go with the same 90-day elimination period. Let's say you are receiving long-term care services on Monday, Wednesday, and Friday each week. At that rate, it would take 30 weeks to meet the requirements of the elimination period or approximately 210 days.

The Daily Benefit Amount is the dollar amount that your policy will cover for the different types of long-term care. In most cases, we see the benefit amount described on a daily basis. However, some policies have broken the benefit amount down by month or by week. But most commonly, if you look at the schedule of benefits, you will see a daily benefit amount. We see that more frequently than monthly or weekly benefit amounts.

The Benefit Period is oftentimes a misunderstood concept. A lot of times, we see individuals that are concerned about the benefit period and, as a result, don't want to initiate a claim because they're concerned that they may outlive the benefit period. So what is the benefit period? And this is key: The benefit period is the minimum duration of time the policy will reimburse or pay for long-term care if you were to use it to its maximum daily or monthly benefit every single day or month. The most common are two-year, three-year, four-year, five-year, or unlimited lifetime benefit plans.

Let's dig into this a little deeper with an example. Let's say you have a three-year policy at $200 a day. That means your maximum benefit is going to be the number of days multiplied by dollars per day. In this example, we're looking at 1,095 days multiplied by $200, which is $219,000. That's your pool of money. If you spend the maximum daily amount of $200 each day for three years, then your benefit will last exactly three years. However, your benefit could last longer than three years if you didn't use the full $200 benefit each day. Let's assume you only spend half the benefit, or $100 each day. Then your three-year plan would last six years. In short, the benefits may last longer than you expect, and therefore, you may want to activate your claim sooner than you initially thought. So make sure you fully understand the definition of the benefit period.

Premium Waiver: In most cases, once a claim is initiated and approved, your premium is waived and no longer has to be paid. This is important because, in the end, this could actually result in a cost savings. Oftentimes, we hear concerns about premiums and premium increases year over year. So, if you have a claim that is approved and the premium is waived, you're now actually benefiting by 1) you're receiving the care that you need plus 2) you no longer have to pay a premium, so you're actually saving money.

Thank you for watching this video. Make sure you watch the next video as we continue this discussion about long-term care insurance policies.


Home Helpers of Bradenton is one of the region's leading home care franchises specializing in comprehensive services for seniors. Home Helpers' sole mission is to make life easier for clients and their families. Based in Bradenton, Florida, the company serves all of Manatee County, including the communities of Anna Maria, Bradenton, Bradenton Beach, Ellenton, Holmes Beach, Lakewood Ranch, Longboat Key, Palmetto, and Parrish. For more information or to request a free in-home care assessment, contact our office at (941) 499-5946 or visit our website atwww.homehelpershomecare.com/bradenton


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