Do You Have a Secret You’ve Forgotten About?
by Carol S. Heape, MSW, CMC
March 11, 2021
I’ve been thinking about the future. “Funny,” you may think, “when I’m sure she’s well over 65.” You’re right but there are days when I wonder how I’ll age. I feel fortunate that I can do what I’m able, but certainly recognize (although very reluctantly) that there are limitations on my abilities. So… it only makes me wonder and worry a bit about how the years ahead will go. It makes me very glad that years ago we made the decision to purchase long-term care insurance. We’ve kept paying the premiums and purchased the cost of living increase option at the time so the benefits have gone up a bit every year to help with inflation.
I’m wondering how many of you did the same thing years ago, put the policy in the insurance box, and forgot about it. When these types of policies were first sold years ago, they were primarily sold as “nursing home policies” with benefits only gained when someone went into a skilled nursing facility and Medicare ran out. Fortunately, the latter policies had broader coverage including care in your own home, a daycare facility, or an assisted living facility. Benefits ranged from a minimum daily rate to a maximum amount each month and lasted three or more years depending on the use & amount purchased.
Of course, all of these types of policies paid in a different fashion but all depended on if/when a person had difficulties with what the industry calls Activities of Daily Living (ADL). These are the most basic of daily tasks that we all take for granted until we cannot do them by ourselves anymore. Feeding ourselves, getting up/down out of a chair, walking independently across the room, bathing/showering & taking care of our own toileting. The standard criteria to gain LTC insurance benefits is to not be able to do 2-3 of these activities without help.
It doesn’t take much for an older person (myself included) to have something happen, a fall, a stroke, a serious illness to need help with the basic everyday tasks. It may hinder us from driving the car, going to the doctor’s by myself, walking up/downstairs, getting groceries, etc.
Do you remember what a strange feeling you had when it was time to sign up for Social Security & Medicare? For me, I kept thinking “I’m surely not that old. Maybe I should wait until I need it.” But firmer heads prevailed and of course, I signed up and have been glad ever since. If you think you may have purchased long-term care insurance through your work or with an independent insurance agent who contacted you, get that policy out and see what it covers. It was pre-planning at its best.
You may have paid for the policy with one lump sum so you may not have monthly or quarterly payments. It’s also very possible that your LTC policy was sold when the insurance company sold all their long-term care policies to another company. Remember Trans America Insurance Company? As with some banks folding into others, so too with insurance companies & long term care insurance. If you’ve paid the premiums to somebody, the policy is still good.
If/when you do have a policy put away somewhere, dig it out to see what you purchased. After all, you did buy this policy because you knew one day it would come in very handy. Note: Also check your bank statements or pension check to see if premiums are being taken out, to whom, and for how much.
This is a treasure you may be unaware of. If your adult children are helping with paying bills and keeping finances sorted, tell them about buying a long-term care insurance policy so they can help you look. You may have an insurance card with a policy number that can be traced. If the policy has gone missing, you can contact the insurance company and they will send you a copy of your policy. What will the policy tell you?
It will give you:
- The amount of long-term care insurance you purchased and if you bought the cost of living increase how much you have in today’s dollars.
- What the policy covers – care for you in your own home, assisted living facility care, or nursing home care.
- Who it covers. More recent policies can cover a married couple. In years past, each person had to purchase their own policy.
- What is necessary to qualify for benefits? How many ADLs or IADLs must you need help with? How is that determined? Some policies require a physician’s letter; others have a nurse call or come out for an evaluation.
- Is there a deductible period and what does that look like? Do you have to pay privately during that time?
- Can you start home care services while you’re waiting for approval?
- Once you’re approved & start utilizing services, is your premium waived? In many cases, this is so.
- How do you file a claim? How long does it take to get approved?
It sounds fussy and it can be BUT it’s well worth it when you find the policy and see what it covers, how it works. After all, you may not remember the intricacies of the policy but it made good sense when you bought it so it’s time to know how it can help you with your independence in the future, where you want to live, how to help pay for that assistance either at home or in placement.
The federal and state laws have changed over the years as well regarding how to pay for long-term care (all settings). Eligibility depending on veterans’ status, income & disability may play a major role in where you live & how it’s paid for. Knowing and having a long-term care insurance policy (forgotten or not) gives you another valuable card in your hand.
When these policies were first written, there was no beneficiary clause. If the insured died before the policy was activated or totally utilized, it was gone. In some cases, an insurance company could transfer the unused benefits to the living spouse if she/he had a policy with the company but that was rare. The newer policies written may include a beneficiary clause for benefit of the estate after a person’s death but not always.
There was a time that long-term care insurance was touted as a great way to plan for our “older” future. They have lost some of their popularity in recent years due in part; I think that we’re all just living longer. When originally written, older adults were dying earlier. Now we’re healthier longer and it’s not unusual to have individuals utilize all their benefits while continuing to live longer productive lives.
So..give it some thought. Pull out those old insurance policies and review them to see what you have. You might be surprised at what’s in there. If you remember signing up for insurance while working, call the retirement benefits section to see if you have a policy through work or your pension. If so, you’ve found a treasure. When you’re at the point you could absolutely use some help, be sure and tell the home care agency you think you may have long-term care insurance. They should be able to help you understand what you have & how to file a claim for benefits you’ve paid for. Some home care companies are a great resource to help you understand the benefits under your long-term care plan and can bill the insurance company directly once you’ve submitted and been approved for a claim. Good luck!
Carol S. Heape, MSW, CMC is the Founder/CEO, Elder Options, Inc. serving the Sacramento Region since 1988 and an elder herself. Carol, a mother of six and a grandmother of nine, continues her work with Elder Options and its staff. In her free time, she enjoys traveling with her husband, gardening, reading, writing, and spending time with her family.