When Long-Term-Care Policies Kick In
Most policies pay when you need help with two of six activities of daily living or you are cognitively impaired. And most have a waiting period of 60 or 90 days.
When does a long-term-care insurance policy start to pay out? What are the benefit triggers, and how long do I have to wait before the benefits kick in?
Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Most long-term-care insurance policies require two kinds of benefit triggers before they’ll pay – either you need help with two out of six activities of living (which generally include bathing, dressing, toileting, eating, transferring and continence) or you have severe cognitive impairment. Your doctor usually needs to fill out a form with the details, and the insurer may ask for additional medical records or may require a cognitive screening to verify impairment, says Mike Ashley, owner of Senior Benefits Consultants, in Prairie Village, Kan.
Most long-term-care policies then have a 60- or 90-day waiting period before benefits kick in, or another time period you chose when you bought the policy (called the “elimination period”). In most cases, the same waiting period applies to any type of care you receive, whether it’s in your home, an assisted-living facility or a nursing home. However, some policies, such as many Genworth policies, have a zero-day waiting period for home care but a 60- or 90-day waiting period for all other types of care.
How the waiting period is calculated can vary and is an important feature to consider when choosing a policy. If your policy has a “calendar day” elimination period, you count each day after the benefit trigger is met. In that case, a policy with a 90-day waiting period could start to pay out within about three months after you meet the trigger criteria. But a policy with a “service day” waiting period counts only the days you receive care. If you need care three days a week, it could take more than seven months to reach the 90-day waiting period.
As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.
Kiplinger Readers' Choice Awards 2023 Results
The results are in for the Kiplinger Readers’ Choice Awards — celebrating the best products and services in personal finance.
By the editors of Kiplinger's Personal Finance • Published
Is Chevron Stock Set for a Rebound?
Chevron stock received its second analyst upgrade in as many days, boosting hopes for a recovery in the lagging energy major.
By Dan Burrows • Published
Short-Term Insurance Plans' Good, Bad and Ugly
retirement You'll need a clear-eyed analysis to gauge the value of short-term care insurance plans and if they're right for you.
By David Rodeck • Published
Retirees, This Is What It Takes to Be Your Own Insurer
Long-Term Care Insurance The costs of long-term care are already exorbitant and will only get worse. Follow this guidance to get in front of the issue.
By Jackie Stewart • Published
You Can Keep Some Assets While Qualifying for Medicaid. Here's How
Long-Term Care Insurance There are some tools you can use to avoid spending down all of your assets, and potentially impoverishing a spouse, while still meeting the qualifications for Medicaid.
By David Rodeck • Published
Insurance for Long-Term Care at Home
retirement In the wake of COVID-wracked nursing homes, increasingly more people are looking at options to age in place with long-term care insurance.
By Alina Tugend • Published
Time for an Insurance Review
Coronavirus and Your Money You may need to update your policies in light of COVID-19.
By Daniel Bortz • Published
The Real Reasons People Decide to Buy Long-Term Care Insurance
Long-Term Care Insurance Before you dig into costs, benefits and contingency plans, step back and look at the big picture. This decision is bigger than budgets and life-expectancy tables. It's about your family and your wishes for them as well as yourself.
By Dennis Ho, FSA, CFA® • Published
Avoid the Obstacles of Long-Term-Care Claims
Long-Term Care Insurance Filing a claim can be an ordeal, but these preventive measures will streamline the process.
By Kimberly Lankford • Published
What to Know Before Purchasing a Long-Term Care Rider
Long-Term Care Insurance Do you know the difference between a long-term care rider and chronic illness rider? Section 7702B and Section 101(g)? If you're contemplating a life insurance policy or annuity with a long-term care rider, make sure to understand the key terms.
By Carlos Dias Jr., Wealth Adviser • Published