What Is Long-Term Care Insurance? Well, it is an insurance policy. On the most basic level it is like all insurance policies: you pay a premium every year hoping you never need any benefits. The benefits from a long-term care policy occur when the insurance company reimburses your expenditures for custodial or supervisory care because you either need human assistance with at least two Activities of Daily Living (ADLs) or have cognitive impairment and cannot safely live without some amount of supervision by another adult. You pay people to help you and the insurance company pays you back. All long-term care policies have the same basic triggering language. This is the legal language in the policy that defines when you are eligible for benefits. However, differences in definitions and restrictions can be significant.   Before you receive benefits: you must be eligible, receive and pay for covered services and satisfy the elimination period. More specifically, for a tax-qualified policy, the following must happen: A "licensed health care practitioner" (doctor, nurse, geriatric care manager or social worker) certifies that, for at least 90 days, you will require either "substantial assistance" with at least 2 ADLs or require "substantial supervision" because of severe cognitive impairment. The licensed health care practitioner writes a plan of care. You notify the insurance company of your need, supply required records and the company agrees you need the care. You begin receiving and paying for the care you require from professional agencies or the facilities defined in the policy. You satisfy the elimination period. The insurance company then begins reimbursing your expenses a month in arrears. Benefits will be paid directly to you unless you ask the company to send them to a care provider. The benefits will have a daily, weekly or monthly maximum dollar limit and will be paid for a maximum period of time. You choose the maximums when you purchase the policy. When you exceed the maximum you must then begin paying with your own funds. Copyright 2005 Arthur Stein. All Rights Reserved. No reproduction without permission. Contact astein@ltcguide.com