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How does my parent’s long-term care insurance work?

When it comes time to prepare for your parent’s long-term care, making sense of all their options and what they can afford can be stressful. If they have a long-term care insurance plan, it adds extra complication. How do you make sense of a policy you didn’t buy?

Here are four things to keep in mind as you work through your parent’s plan:

1. Understand the plan’s source and maximum benefits

Long-term care insurance can be an individual plan, an employer-sponsored plan, a plan offered by an organization or a state partnership program. Most likely, your parent has an individual plan, as those were popular in years past.

You should also determine if your parent’s plan is a solo policy or a joint policy with their spouse (either your parent or stepparent). These plans typically have a maximum benefit for everyone insured. For instance, if your parent’s policy with their spouse has a maximum $100,000 benefit and their spouse already used $50,000, there will only be $50,000 available for your parent.

2. Policies have changed over the years

The policies of yesterday were written differently than those on the market today. If your parent’s policy is older, there may be hiccups that arise.

Older contracts provided “nursing home coverage” or “home health care coverage.” Now that assisted living facilities are more readily available and popular, they are included in new policies, but an older policy may try to argue those options are not an eligible care provider.

3. Personal care may not be covered

Some insurers will refuse to pay benefits to cover “personal care” such as light housekeeping, errands and other such chores. Providers may require you to prove your parent meets the policy’s activities of daily living (ADLs) requirements. Most policies require an insured person to be unable to perform two or more ADLs. These include:

  • Eating
  • Bathing
  • Dressing
  • Sitting up and down from a toilet
  • Transferring themselves to or from a bed or chair
  • Continence

4. Failure to pay premiums could lapse coverage

Benefits may be denied if your parent has forgotten to pay their premiums. However, if they have missed these payments due to a cognitive impairment, a physician’s statement demonstrating this impairment can help with reinstating the policy.

If you run into issues with the insurance company, working with an elder law advocate can help cut through the red tape and get to the root of what you parent has earned through years of paying for coverage. Understanding long-term care insurance policies from the past can be difficult, but those benefits are owed to your parent and can help cover the cost of their elder health and stability.

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