| Long-Term Care
Insurance: Claim's Process
How Do You Become Eligible
For Benefits?
As with all types of insurance, long-term care insurance pays benefits
when an "insurable event" occurs. The insurable event with life
insurance, for example, would be the death of the insured. The
insurable event with an LTC insurance policy has to do with needing
assistance.
Specifically, there are 2 ways to become eligible for benefits with LTC
insurance:
Inability
to perform ADLs
and/or
Cognitive Impairment
Inability
to Perform ADLs At the time of claim, an ADL
assessment will be performed to determine
the extent of your inability to function without assistance.
The best policies pay benefits if you are unable to perform 2 or more
ADLS without assistance. Never consider a policy that requires you to
need assistance with more than 2.
Especially be aware of "tricky" policies that require you to lose more
ADL's for home care or care in an assisted living community.
Cognitive
Impairment Cognitive impairment can
"trigger" benefits regardless of whether or
not the policyholder is able to perform ADLs. Conditions such as the
onset of Alzheimer's Disease are included in this category of cognitive
impairment.
If this is the reason for the need for care, a cognitive assessment
will be performed to determine the extent of the condition.
Plan of Care
If the ADL and/or cognitive impairment assessment determines
that you
are eligible for benefits, a plan of care is developed. (See Care
Coordination below)
If you become eligible for benefits, some policies may pay benefits for
"homemaking services" such as cooking, cleaning, and running errands.
These services fall under the category of "Incidental Activities of
Daily Living", or IADLs.
Clarification:
You cannot receive
IADL services unless you first become eligible for benefits by either
losing your ability to perform ADLs, or by being cognitively impaired.
LTC insurance will not pay for someone to clean, cook, and run errands
for you unless you first become eligible for benefits by "triggering"
an insurable event.
Policy Exclusions
All insurance policies contain exclusions: conditions or circumstances
which will prevent a policyholder from collecting benefits from the
policy, even if they would have otherwise qualified for benefits.
Typical exclusions found in most LTC
insurance policies include:
- Treatment
or services for which no charge
was made, with the exception of a cash method policy
- Care
provided or paid for by another type
of coverage. For example, if Medicare or your regular health insurance
paid for your care, your LTC insurance policy would not normally pay
additional benefits.
- War or acts of war
- Alcoholism or drug addiction
- Self-inflicted
injuries or attempted
suicide
Beware of Mental
Exclusion Clause:
Some LTC insurance policies contain an exclusion that states that
mental and nervous disorders will not be covered, unless the disorder
is "Organically Demonstrable". Most states have banned this exclusion
in policies being issued today, but be sure and read the policy
exclusion section of any policy to make sure this clause is not
included.
Avoid any policy that
contains an exclusion
of any kind for mental or nervous disorders.
Filing a Claim
The claim's process requires that information
from 3 sources be
provided to the insurance company:
| 1. | The
policyholder | | 2. |
The provider | | 3. |
The policyholder's physician |
It's important that the
information from these 3 sources be consistent
or the claim could be delayed or denied.
The LTC Planning and Insurance expert who works with you when the LTC
insurance policy is issued should always be available to assist you and
your family in the claim's process. Prior to purchasing coverage, ask
for evidence, in writing, of policyholders who have been assisted in
the past with claims.
What If Your Claim is Denied?
If the claim's process is handled properly,
the likelihood of a
legitimate claim being denied is rare. Most states have passed laws
mandating high penalties for insurance companies that deny a legitimate
claim. However, if you feel a legitimate claim has been denied, contact
your state insurance department to file a complaint.
Care Coordination
Care Coordination is a value-added benefit that
provides assistance to
family members at the critical time of the need for care. Care
Coordination is defined as a service that helps manage the coordination
of a person's care among all the parties involved. These parties may
include the policyholder's family and friends, as well as any paid
caregivers, facilities, and health care practitioners.
Care Coordinators are health care practitioners who are able to assess
the individual needs of a person in need of care, identify the type(s)
of care needed, and assist the family in obtaining the care they need.
In addition to conducting the initial assessment and
developing a plan
of care, Care Coordinators may also perform other services such as:
| 1. |
Develop a plan of care | | 2. |
Contact care providers chosen by the
insured to initiate services | | 3. |
Negotiate service provider rates |
| 4. | Assist with initial claim's forms |
| 5. | Provide the
certification required to
satisfy requirements from the doctor |
| 6. | Provide ongoing monitoring of the
quality of services provided | | 7. |
Development of transitional plans |
| 8. | Intervention during a crisis |
Be
sure that any long-term care insurance policy you consider includes
the Care Coordination benefit. All other aspects being equal, policies
that offer this benefit are superior to policies that do not. Not only
will the Care Coordination benefit relieve family members from the
burden of trying to locate quality caregivers, it may also result in
better utilization of the benefits of an LTC insurance policy by
coordinating informal and formal care.
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