Over 99% of long-term care insurance policies sold today are tax-qualified,* which means the way to get a claim paid is the same as it is Federally controlled in order for the premiums to be tax-free according to IRS guidelines and enjoy other tax incentives. Just like you can need care physically or mentally, you can trigger the benefits in one of those two ways:
Physically – a licensed health care practitioner (physician, Registered Nurse or licensed social worker) must tell the insurance company that you are expected to need help with at least two activities of daily living for at least 90 days. The six activities of daily living are:
- bathing, dressing, transferring from bed to chair, toileting, continence, eating
Note that the 90 day expectation of need is not a waiting period. You could have bought a 30 day waiting period, and if you are expected to need help at least 90 days, the benefits will begin on the 31st day. So to be clear, however, long-term care insurance isn’t intended to pay for a broken arm or even a broken hip with today’s technology as conditions like these will not generally require someone to need help at least 90 days.
Mentally – the licensed health care practitioner must certify to the insurance company that you are impaired to the point of being a threat to yourself or someone else. For example, if you have high blood pressure and can’t remember to take your medicine, you could cause yourself to have a stroke. If you will walk out in the middle of the interstate, you could cause 20 other people to have a stroke 🙂
With either method of certification, the licensed health care practitioner must work out a 12 month plan of care for you with the insurance company and you must stick to that. For example, if you are at home and you and your family decide you can no longer be safe at home, you can’t pack your bags and move into an assisted living facility without getting the plan of care changed and approved by your health care practitioner and the insurance company.
That’s how you become certified to receive benefits. Please refer to Your Customized Benefit Selection Process to learn more about the waiting period (deductible) before you receive the first benefit check. While you’re there, you can also learn about the different ways to receive the money (cash, indemnity or reimbursement). If you choose the reimbursement or indemnity method, you will need to use approved care providers. If you choose cash or a plan that provides at least part of the benefit in cash, you will have the flexibility to pay informal caregivers no questions asked or use the money any other way you need it.