Questions to Ask Your Agent about Long-Term Care Insurance

When evaluating long-term care insurance policies, you will want to ask your agent several questions. At a minimum, be sure to ask:

•       What is covered by the policy?

•       What is NOT covered?

All long-term care insurance policies cover skilled nursing care in a long-term care facility, commonly known as a nursing home. Some policies also pay for home care (a trained aide to come to the home to help the insured) and/or assisted living (a facility that provides assistance to residents but not medical nursing care).

In order for a long-term care policy to pay a benefit, it usually requires that the insured require assistance with at least two activities of daily living (ADLs). ADLs are bathing, dressing, toileting, continence, eating and transferring (moving from bed to chair and vice versa). Some policies include walking as an ADL. Long-term care policies also pay a benefit if the insured has a cognitive impairment that requires significant supervision (i.e., Alzheimer’s disease or dementia) regardless of the ability to actually perform ADLs.

•       What kind of deductible does the policy have?Long-term care insurance policies include an elimination period, which acts like a deductible. The policy specifies the number of days the insured needs to be in the nursing home (or receiving care) before the policy begins to pay a benefit. Many policies offer a choice of elimination periods, and the longer the elimination period is, the lower the premium will be.

•       How much experience has the agent had with long-term care policies?Some agents sell only long-term care insurance, while others sell life, disability, automobile and homeowners insurance as well. There is nothing inherently good or bad about being a specialist or a generalist, but you will want to work with an agent who has had some experience selling long-term care insurance policies. These are complicated contracts, and an experienced agent will be better able to explain the details and help you to determine the best policy for your needs.

•       How are claims processed?Be sure you understand how your policy will actually pay benefits. Ask if the insurance company will pay the nursing home (or other care provider) directly, or if you will have to pay and get reimbursed by the insurance company. Ask how long it takes for the initial claim to be approved. (Once your claim is approved, payment should be automatic.) Ask what percentages of claims have been approved by that company. Then verify the answer with your own research, which can be done online. Some companies have recently come under fire for rejecting legitimate claims, so you want to be sure that the company you select has a good track record of paying legitimate claims.