Long term care insurance is a worthwhile investment if you are able to purchase it when you are relatively young and in good health and can afford the premiums. It’s used to pay for care if you have a chronic illness, dementia, or need help with at least two of six activities of daily living.
It’s not perfect, but having LTC insurance is better than not having LTC insurance. People think Medicare will pay for LTC or nursing care but it doesn’t. People also think Medicaid will pay for everything if they need long term care, but even Medicaid has limitations.
Even if you have long term care insurance, it’s not a slam dunk. For one thing, it takes time to navigate through the long term care maze of insurance, veteran’s benefits, and pensions. There’s almost always a gap between the time someone is admitted to a nursing home and when benefits are paid, even with long term care insurance.
You’ll need to plan for care with a detailed review of your policy. A recent article from CNBC, “Making a plan to pay for long-term care: Insurance and other alternatives,” advises figuring out as much as possible long before filing a claim.
Even when you’ve done all the planning, keep this in mind: Long term care isn’t just expensive for individuals—it’s costly for insurance companies too. Skyrocketing costs for long term care made selling these policies a no-win situation for insurance companies. As a result, most insurance companies stopped selling stand-alone long term care policies after it became obvious that they were not profitable. Most policies sold today are part of a hybrid policy, with LTC bundled into a life insurance or annuity product.
Insurance companies who had sold policies took a further step to minimize their losses, something familiar to Newfield Law Group. Just as filing a claim for long term disability benefits has become a nightmare for many claimants, people who file claims for Long Term Care coverage face a series of obstacles. By making it difficult to file a successful claim, the insurance companies are trying to control their risk exposure.
If you or a loved one is about to file for Long Term Care insurance, find your original policy and review it carefully. There will be language about when someone is eligible for benefits, how eligibility is determined, dates and deadlines for when a claim may be filed, and information about how much the policy will pay. Also, be sure the nursing facility has the correct credentials and is an accepted care provider.
