Uncommon Long Term Care Insurance Information You May Not Know

If you think you know everything there is to know about long term care insurance, you may want to look at these:
Long Term Care Insurance Policy Exclusions

Here are exclusions in a long term care insurance policy:

• Pre-Existing Condition

A pre-existing condition is an illness or disability for which you received medical advice or treatment during a specified period before applying for coverage.
Most policies will not pay benefits for these conditions for a certain length of time, usually six months, after you become policyholder.

• Family Members

In general, policies do not pay members of your family to take care of you. However, some policies will pay to train family members to be your care provider.

• Mental and emotional disorders or disease (other than Alzheimer’s disease)

• Alcoholism and drug addiction

• Treatment already paid for by Medicare or by any government program except Medical Assistance

• Attempted suicide or intentionally self-inflicted injuries.

Limits to Long Term Care Insurance

All long term care insurance policies contain limitations and exclusions that you should know and understand. These following limitations are especially helpful to keep in mind when you consider buying long term care insurance:

• Pre-Existing Condition Waiting Period

The waiting period that must pass before the policy begins to pay for care related to a health condition you had when you applied for it. Waiting periods can go up to six months before you start receiving benefits for your condition.

• Eligibility

Each company sets its own underwriting standards, including age limits after which time you will be unable to buy a policy. All individual policies must be renewable.
The renewability provision lists the circumstances under which the policy can be cancelled by the insurance company or by how much, and when, premiums can be raised.

• Exclusions

There are specific conditions for which long term care insurance will not pay. For instance, insurance companies may choose not to cover long term care related mental or nervous conditions, alcoholism or other health conditions or situations.

On the other hand, disorders such as Alzheimer’s must be covered.

How Do I Buy a Long Term Care Insurance Policy?

When you are ready to purchase a long term care insurance policy, insurance companies will “underwrite” your risk. It means the company looks at your current health and health history before they issue a policy.
Most insurance companies who sell long term care insurance use medical underwriting to determine if they will sell you a long term care insurance policy.

Medical Underwriting

A process to review a number of factors, including your health history, which helps a company decide whether to insure you.

Insurance companies will not sell you a long term care insurance policy if you do not meet their underwriting standards. If you do not meet the guidelines, you may not qualify for coverage.

Some companies do what is called as “shortform” underwriting. When applying for coverage, they will ask you a few questions about your health.

Some questions may ask, “Have you been hospitalized in the last 12 months?” or “Have you been confined to a wheelchair?” Some companies may ask for more information, examine your current medical records or ask for a health statement from your doctor.

No matter what kind of underwriting a company uses, it is very important to answer all health questions as truthfully and thoroughly as possible.

If a company finds out you did not fully disclose your health status on the application, the company may refuse to pay your claim or cancel your policy. This generally occurs in the first two years after purchase, however fraudulent misstatements may result in cancellation at any time.

Normally, a copy of your application is attached to your policy. Review this application to be certain that you have answered all health questions truthfully and that the information you provided to the company is accurate and complete.

Companies may impose a waiting period for pre-existing conditions which means: policy benefits will not be paid for services related to conditions which existed before you purchased the policy.

If the company finds out that you have not disclosed a pre-existing condition on your application, it may refuse to pay for treatment related to that condition, and terminate your coverage.

What are Benefit Triggers?

Each insurance policy has certain conditions that need to be met before the policy begins paying benefits. It’s important to know what a policy’s benefit triggers are before you buy.

When your physical or mental condition reaches a specific level of disability, you have met the benefit trigger requirements and are entitled to benefits from the policy. Most policies, specifically those that are federally tax-qualified, have more restrictive benefit triggers.
To qualify for benefits from a federally tax-qualified policy or certificate, you must be considered a chronically ill individual which is someone who has been certified by a licensed health care practitioner within the preceding 12 months as:

• Being unable to perform (without substantial assistance from another individual) at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity.

• Requiring substantial supervision to protect the individual from threats to health and safety due to a severe cognitive impairment.

Benefit triggers usually are based on the policyholder’s ability to perform activities of daily living. The activities of daily living are specified in law for federally tax-qualified plans as:

1. EATING
- Means of feeding oneself.

2. TOILETING
- Means of getting to and from the toilet, getting on and off the toilet and performing associated personal hygiene.

3. TRANSFERRING
- Ability to move yourself in and out of a chair, bed or wheelchair.

4. BATHING
- Ability to wash yourself in the tub or shower, get in and out of the shower or give yourself a sponge bath.

5. DRESSING
- Ability to put on and take off clothing as well as any necessary braces, fasteners or artificial limbs.

6. CONTINENCE
- Ability to sustain bowel control and bladder function or perform necessary hygiene associated with a catheter or colostomy bag.

Longevity research shows that bathing is usually the first activity of daily living that aging individuals cannot do and must avoid performing alone to prevent risks. Most policies use all six activities of daily living as benefit triggers.

There are policies that could use only five activities of daily living as benefit triggers, but the inability to bathe yourself must be one of the ADL’s that cannot be done.

References:

http://www.portal.state.pa.us/portal/server.pt?open=514&objID=625797&mode=2
http://www.ltcoptions.com/long-term-care-insurance/