Long-Term Care Insurance

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.

Question:

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?

Answer:

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.

Most Popular

You'll Save More on Green Home Improvements Under the Inflation Reduction Act
Tax Breaks

You'll Save More on Green Home Improvements Under the Inflation Reduction Act

Tax credits for energy-efficient home improvements will be extended and expanded by the Inflation Reduction Act.
August 12, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
3 Dated Rules of Thumb Retirees Should Think Twice About
investing

3 Dated Rules of Thumb Retirees Should Think Twice About

The tried-and-true investing and saving rules of thumb retirees depend on may no longer be as reliable as they hoped. Don’t let dated “rules” steer yo…
August 11, 2022

Recommended

What Will Happen With Health Costs in 2023
Business Costs & Regulation

What Will Happen With Health Costs in 2023

Higher drug costs will accelerate health insurance premium increases.
August 15, 2022
Inflation Reduction Act Will Boost Obamacare Tax Credit
Tax Breaks

Inflation Reduction Act Will Boost Obamacare Tax Credit

Enhancements to the premium tax credit will be extended for three more years once the Inflation Reduction Act is signed into law.
August 12, 2022
‘I Can’t Retire – I Need Health Insurance’
health insurance

‘I Can’t Retire – I Need Health Insurance’

Health insurance is seen as a huge hurdle for early retirees, but the answer to finding affordable coverage could be simpler than you think.
August 7, 2022
Tax Changes and Key Amounts for the 2022 Tax Year
tax law

Tax Changes and Key Amounts for the 2022 Tax Year

Americans are facing a long list of tax changes for the 2022 tax year. Smart taxpayers will start planning for them now.
July 19, 2022