Paying for care with your long-term care insurance policy

On average, someone who is 65 today has almost a 70 percent chance of experiencing a long-term care event that would result in a need for care services and support. I recently worked with a client who had a long-term care insurance policy but was afraid to use up the benefits. Unfortunately, as his condition worsened, his wife was overwhelmed by his needs.

The reason you have longterm care insurance is to have tax-free money to pay for care. When an event happens, absolutely apply for benefits to help you and your family through a difficult time. Getting the proper early care can also aid in recovery—especially in cases where rehabilitation is involved.

A long-term care event is eligible for insurance benefits when you cannot do at least two of the six “activities of daily living,” including bathing, caring for incontinence, dressing, eating, toileting, and transferring, or if you suffer from dementia or other cognitive impairment. Once you experience an event, I recommend you or your family members start the claims process by requesting a claims packet from your insurance company. Filling out the claims packet and getting the necessary documents can take several weeks. During that time, you will be working through your policy’s elimination period.

Additionally, your insurance provider may have insight on specialized facilities or physicians for your circumstances, thus reducing your time researching your care options.

The elimination period is the amount of time that must pass after a triggering event but before you start receiving benefits. Generally, most policies have a period of 90 days; however, it is important to know from the start if you are dealing with calendar days, measured by the number of days, or service days, measured by the days care is provided. You must cover the cost of any services received during the elimination period.

In the initial claims packet, you will have to fill out a Policyholder Statement, summarizing medical events reflecting on the possible need for care. Be sure to keep track details such as dates of doctor visits and/ or hospitalizations, and any invoices for care that were paid out of pocket. You will need to obtain an Attending Physician Statement, a summary from the doctor acknowledging your need for care, a Nursing Assessment, summarizing of medical issues, and a “Plan of Care.” Doctors and facilities are very familiar with these documents, so you should have few issues obtaining them. You will also need a Provider Statement detailing the care provided with an invoice. Care may be for in-home or a longterm facility. You will also need a signed HIPAA form (Health Insurance Portability and Accountability Act) that authorizes access to the patient’s medical files.

You or your agent—a family member, friend, or even an advocate from a law firm— will need to be diligent with details and follow up with multiple parties to present the information to the insurance company. Once your benefits begin, most policies will pay your costs up to a pre-set daily limit until you reach the lifetime maximum. As the average duration of care is around three years, it is beneficial to start the process early and use the benefits you have paid for to protect your family’s wealth.

William G. Lako, Jr., CFP®, is an Executive in

Residence at Kennesaw State University’s Coles College of Business and a principal at Henssler Financial and a co-host on Atlanta’s longest

running, most respected financial talk radio show

“Money Talks” airing Saturdays at 10 a.m. on AM 920 The Answer. Mr. Lako is a CERTIFIED FINANCIAL

PLANNER™ professional.