Financial Information: Understanding Long Term Care Insurance

Selecting a Policy

Long term care insurance may be sold directly to individuals or through an employer group or other organization.

With group policies, while you do not generally have a choice of companies, the advantage is that your organization likely searched for and selected a company and policy to offer you. However, you may have fewer choices in the amount of coverage and options in the policy.

The most important factor in selecting a policy is the set of conditions required to qualify for coverage. Buying a policy that covers long term care services will not help if you do not qualify for benefits. Many policies require a policyholder to have a cognitive or physical impairment to qualify for benefits.

There is a policy cost analysis form on page 8 of this brochure. This will help determine which policy best meets your needs. Normally there are two methods of qualifying for benefits:

1. Cognitive Impairment – People who are cognitively impaired typically have Alzheimer’s disease or other forms of dementia. A policy’s definition of cognitive impairment should not refer to the activities of daily living (ADLs) since people with dementia usually can perform them.

2. Physical Impairment – People who have a physical impairment need assistance with the ADLs, such as eating, dressing, transferring (e.g., out of bed to a chair), bathing and taking medications. Policies differ in the number of impairments a person must have before they qualify for benefits.

Another important factor is who decides whether or not you qualify for benefits. This entity is often called a "gatekeeper." Most policies require a licensed health care practitioner to write a plan of care. Some insurance companies offer a care (or case) manager to determine if you qualify or continue to qualify for benefits.

Long term care insurance may be sold directly to individuals or through an employer group or other organization.

With group policies, while you do not generally have a choice of companies, the advantage is that your organization likely searched for and selected a company and policy to offer you. However, you may have fewer choices in the amount of coverage and options in the policy.

The most important factor in selecting a policy is the set of conditions required to qualify for coverage. Buying a policy that covers long term care services will not help if you do not qualify for benefits. Many policies require a policyholder to have a cognitive or physical impairment to qualify for benefits.

There is a policy cost analysis form on page 8 of this brochure. This will help determine which policy best meets your needs. Normally there are two methods of qualifying for benefits:

1. Cognitive Impairment – People who are cognitively impaired typically have Alzheimer’s disease or other forms of dementia. A policy’s definition of cognitive impairment should not refer to the activities of daily living (ADLs) since people with dementia usually can perform them.

2. Physical Impairment – People who have a physical impairment need assistance with the ADLs, such as eating, dressing, transferring (e.g., out of bed to a chair), bathing and taking medications. Policies differ in the number of impairments a person must have before they qualify for benefits.

Another important factor is who decides whether or not you qualify for benefits. This entity is often called a "gatekeeper." Most policies require a licensed health care practitioner to write a plan of care. Some insurance companies offer a care (or case) manager to determine if you qualify or continue to qualify for benefits.

>> next

Download "Financial Information: Understanding Long Term Care Insurance" in Adobe Acrobat format. Get Help with Acrobat.