Helping your parents with long-term care insurance claims

By: Kimberly Lankford

Long-term care insurance can help pay for the high cost of care in a nursing home, assisted-living facility, or at home. But in most cases, the person who buys the policy isn’t the one who handles the claim — that responsibility often falls to the adult children, who may already be overwhelmed by dealing with their parents’ health issues, scrambling to find care, and trying to figure out how to pay for it. If your parents have long-term care insurance, the coverage can help with the financial burden — but you may not even know whether they have the insurance or what needs to happen for the policy to pay out. The following steps can help you help your parents with their long-term care insurance claims and avoid mistakes that could delay the payouts.

1. Find out whether your parents have long-term care insurance and how to contact the agent or company — preferably before they have a claim. Read the policy and ask the insurer or agent to explain the requirements for receiving benefits, so you’ll be prepared if your parents start to have health issues that could qualify. Most long-term care policies will pay out if the insured needs substantial assistance with two out of six activities of daily living (bathing, dressing, toileting, transferring, eating or continence) or has severe cognitive impairment and needs substantial supervision. But some policies that were sold before 1997 have different criteria — for example, some older policies require a 3-day hospital stay first.

2. Contact the company as soon as your parents start to need any help, even if they wouldn’t qualify for payouts yet. Find out about any requirements for caregivers or facilities before you make decisions about their care. For example, some policies only pay home-care benefits if you hire a licensed caregiver from an agency, or only cover nursing-home care in a state-licensed facility. Some older policies may not cover assisted living, even though newer policies do. Knowing the requirements up front can help prevent your parents from having to switch to a new caregiver after establishing a relationship, or having to move to another facility in order to receive benefits. Some insurers even offer services to help you find eligible caregivers and facilities in the area. Find out what paperwork the insurer requires to authorize you to help with your parents’ claims.

3. Find out about the policy’s elimination period. This is the waiting period before benefits kick in, and the rules can be confusing. Many policies have an elimination period of 60 or 90 days, but some have a 0-day elimination period for home care and a longer waiting period for other kinds of care. Also find out how the waiting period is calculated, which can be especially important when receiving home care a few days a week. Some policies have a “calendar-day” elimination period, which starts the 60 or 90 day clock ticking when they meet the benefit triggers, even if they only receive care a few days a week. But others only count the days they actually receive care, or only count weeks when a licensed caregiver provides care for a certain number of hours. Knowing how the elimination period is calculated can help when deciding how to schedule paid caregivers at the beginning to maximize the benefits.

4. Find out what evidence the insurer needs to continue paying benefits. A common complaint from people handling their parents’ claims is that they have to provide a lot of ongoing paperwork for the payouts to continue, even if their parents’ health hasn’t changed. The caregiver or facility may need to submit forms to the insurance company every few weeks documenting the type of care that was provided, and specifying which activities of daily living they helped with. When claims are delayed, one of the main reasons is because the caregiver or facility didn’t provide the proper paperwork. Find out whether the insurer offers any procedures that can simplify this process, such as submitting the paperwork online.

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