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Long-term care benefits come most easily if you know your policy

Updated: May 3, 2013 12:15PM

Q . I’ve heard that people with long-term care insurance have a tough time getting paid. Is this true?

A. Long-term care insurance has been getting its share of bad press lately, because of premium increases. But for those who are already receiving benefits, and their families, there is a very positive side to this story.

 “Ten of the leading long-term care insurers pay $10.8 million in claims daily and the industry pays out over $6 billion a year,” explains Jesse Slome, director of the American Association for Long-Term Care Insurance. “Some individual claims exceed $1 million. And in a given year, about 200,000 policyholders receive benefits from their LTC insurance.”

Slome also says a recent government HHS study found that many claims were turned down because the individuals did not understand their policy coverage and were not filing claims properly.

Honey Leveen, a nationally respected LTC agent and self-proclaimed LTC “Queen” (

) acknowledges that a few LTC companies got out of the business, sometimes creating substantial roadblocks to the claims process.

Leveen advocates for her clients, and notes: “It is very unfortunate that the elderly and/or their families have these unpleasant, time-consuming, frustrating experiences. Unfortunately, many agents are no longer available to assist after the sale. Just remember that perseverance yields success — and that these are ironclad contracts.”

Here’s some advice from Claude Thau (

), an actuary who ran a major insurer’s LTCi division, and is now an advocate for LTC. The first step, says Thau, is to either meet with the agent who sold you the policy, or contact the company, and actually go over the process of filing a claim. Here are some key ingredients in your policy that you should understand:

Indemnity or reimbursement. Does your policy pay a specific dollar amount per day, or month? Or does it reimburse specific bills for service?

Elimination period. How many days of care must you pay for (typically 90 or 100 days) before the policy will start paying? If you can satisfy that “deductible” with lower cost home care services or adult day care, it may be worthwhile to start care promptly.

Activities of daily living. Understand these “triggers” which must be certified by a physician before the insurance company will be able to pay claims. Ask if your own health care professional can certify the need.

Caregiver definition. Some policies require more expensive certified caregivers, others will compensate home health care aides, and others may pay family members. Understand your policy requirements.

The family member who will be involved if you need care should be included in this review. Ask the insurer about their “care coordinator” or “manager” services, which are incredibly helpful — especially if you are alone. Visit nearby facilities while you are able to choose. Or go to www.

to search for your own geriatric care manager. The cost of this service is likely covered by your insurance.

And always start the claims process as soon as possible. Your insurer may be able to negotiate a discounted price at your chosen provider if you get them involved before becoming a resident.

LTC insurance is a valuable benefit. Start now to understand how to make the most of it.

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