Buying long-term-care insurance is usually a smart way to protect your finances and your family from the potentially massive cost of care. But after paying premiums for years, you don’t want the insurance company to hassle you—or your children—when you submit a claim.
Even if the insurance company ultimately pays out, the claims process can be slow and complicated. It’s easy to make mistakes that could delay or jeopardize the payout. And the person who bought the policy ordinarily isn’t the one who submits the claim.
One frequent sticking point is the waiting period. Some policies have a zero-day waiting period for home care and a longer waiting period for nursing homes and assisted living. The fine print can even trip up the experts. Jennifer Burnham-Grubbs is the cofounder of Quantum Insurance Services, in Los Angeles. Her father-in-law, Carroll Lam, who recently died at age 84, bought a policy when he was in his early fifties. After a heart attack, he needed help with several activities of daily living. His wife, Donna, 72, had been providing the care, but it was getting increasingly difficult, and they realized that his long-term-care policy could pay for professional caregivers.
The policy had a 60-day waiting period. Jennifer thought that meant it would start to pay out 60 days after the insurer said he qualified for care, even if Donna was the one to care for him. But the policy only counted the weeks when he received at least two hours of care from a caregiver who was certified by the state. “That was eye-opening,” says Burnham-Grubbs. “Now that we’ve been close to it, we see the nuances firsthand.”
In many cases, 20 years or more have passed between buying the policy and using the benefits— and in that time, the types of care and rules for new policies may have changed. Bonnie Burns, of California Health Advocates, worked with a woman who was considering an assisted-living facility with a memory-care unit for her mother, who had dementia. But because such facilities didn’t exist when she bought the policy 20 years ago, the claim was initially denied. Burns helped her appeal to the insurer, showing that the memory-care unit met the policy’s licensing and care requirements, and the insurer ended up paying the claim.
The following steps can help your long-term care claim go smoothly for yourself or your relative—and help you fight back if you’re having trouble getting your claim paid.
Review the policy with your adult children. It’s important to let your adult children (or another person you trust) know about your long-term-care insurance long before you need to use it—when you’re usually not in a position to handle the claim yourself. Give your adult children a copy of the policy and let them know how to start the claim. Make sure they have the contact information for the insurance company’s claims department and the agent who sold you the policy.
Review the requirements for receiving payouts with them so that they can keep an eye out if you start to need help with activities of daily living or become cognitively impaired. Find out what documentation the insurer requires for them to handle the claim on your behalf, such as a power of attorney and HIPAA authorization.
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