Lesser-known LTCi Benefits

Long-Term Care Insurance (LTCi) can be an invaluable source of funds for families who have loved ones needing custodial care at home or in a facility.

Custodial care (as opposed to skilled nursing care) involves providing an individual with assistance with the Activities of Daily Living (ADLs) such as bathing, dressing, transferring, eating, toileting and continence. Custodial care also comes into play when an individual requires substantial supervision due to a severe cognitive impairment. In both cases, the care is expected to last at least 90 days.

Traditional (pay-as-you-go) policies sold over the last 20 years have generally been comprehensive and reimburse expenses for formal (in some cases informal) care at home or in a facility such as an assisted living, nursing home, memory care facility, even adult day care.

But these policies also include some lesser-known benefits that can be very helpful also.  In all cases, though, the policyholder must first qualify for benefits, which means requiring assistance from another person with at least two of the six ADLs (mentioned above) or due to a severe cognitive impairment (Alzheimer’s, etc.)

Here are some common, but lesser-known benefits inside many traditional LTCi policies.

Equipment Benefit – Sometimes called “stay-at-home” benefit, this benefit will typically reimburse the policyholder for home equipment and modifications such as ramps, stair lifts, grab bars, etc. This is a lifetime benefit and is normally the equivalent of 2-3 months of benefits.

Respite Care – This is care provided that allows the primary, unpaid caregiver a respite from his/her caregiving duties. This care can be provided at home or in a facility, but is usually provided in an assisted living facility.  This benefit is equal to 21 – 30 days each year, depending on the policy.

Caregiver Training Benefit – This is a reimbursement of expenses to train an unpaid caregiver (typically a family member) who is providing care at home but requires special training to perform this care. This benefit is a lifetime benefit equal to approx. 20% of the monthly benefit.

Bed Reservation Benefit – If you are temporarily absent from an assisted living, perhaps due to a hospitalization or other circumstance, the assisted living will charge a bed reservation fee, and this fee can be reimbursed by the policy.  Many policies cover bed reservation fees up to 60 days per year.

Waiver of Premium Benefit – This benefit waives premium payments as long as the insurance company is paying benefits to the insured. Not all policies include this benefit, but many do.

International Benefits – Insurance normally will reimburse a policyholder for care outside the U.S., but the daily or monthly benefit and/or benefit period are usually very limited, sometimes to a maximum of only one year of benefits at only 50% of the total monthly benefit. Each policy is different. However, international claims are very rare.

Alternative Care Benefit – Examples of alternate care benefits are in-home safety devices, meals on wheels, equipment in your home not covered under the Equipment Benefit, rental or lease of emergency medical response devices, other services designed to help you remain at home.

Survivorship Benefit – If a couple has been insured under shared or identical individual policies with a shared rider for at least 10 years without filing a claim when one dies, the survivor’s premium is waived for life, with no change to policy benefits.

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