Millions of Americans purchased long-term care insurance policies in the 1980s, 90s, and 2000s — and many have no idea what they actually bought. The policies were complicated. The sales conversations focused on the future, which felt abstract. And the paperwork got filed away and forgotten.
If your parent or spouse has a long-term care insurance policy — or if you're considering purchasing one — this guide will help you understand what these policies do, how to use them, and what to watch out for.
What Long-Term Care Insurance Covers
Long-term care insurance (LTCI) is designed to cover the cost of care services when a person can no longer perform a certain number of 'activities of daily living' (ADLs) independently — or when a cognitive impairment such as dementia requires supervision.
Most policies define the 'benefit trigger' as needing assistance with 2 or more of 6 ADLs:
- Bathing
- Dressing
- Eating
- Transferring (getting in/out of bed or chair)
- Toileting
- Continence
Cognitive impairment (such as dementia) is also a benefit trigger in most policies, regardless of ADL status.
The care settings covered vary by policy, but most modern policies cover: in-home care, adult day programs, assisted living facilities, and nursing home care. Older policies may have been nursing-home only — this is one of the most important things to check.
Key Policy Terms to Understand
Daily Benefit Amount (DBA)
The daily benefit amount is the maximum the policy will pay per day for covered care. Common amounts range from $100 to $300 per day. If care costs more than the DBA, the policyholder pays the difference.
Benefit Period
The benefit period is how long the policy will pay benefits. Common options are 2 years, 3 years, 5 years, or lifetime (rare and expensive). Some policies use a 'pool of money' approach — total available dollars — rather than a fixed period.
Elimination Period
The elimination period is essentially a deductible measured in time rather than dollars. It's the period at the beginning of care — typically 30, 60, or 90 days — during which benefits are not paid and the policyholder is responsible for all costs. The most common elimination period is 90 days.
Important: 'calendar days' vs 'service days' elimination periods differ significantly. A 90-calendar-day elimination period is met in 90 consecutive days. A 90-service-day elimination period requires 90 days of paid care, which could take much longer.
Inflation Protection
Policies purchased years ago may or may not have inflation protection — an automatic annual increase in the benefit amount. Without inflation protection, a $150/day benefit purchased in 2000 has significantly less purchasing power today. Check whether your policy has this feature.
How to File a Claim: Step by Step
Step 1: Find the Policy
If you can't find the policy, contact the state insurance commissioner's office — they maintain records of active policies issued to state residents. You can also request a copy directly from the insurance company if you know the insurer's name.
Step 2: Review the Policy
Before contacting the insurer, understand what you have. Read the benefit trigger criteria, daily benefit amount, elimination period, and covered care settings. Note whether a licensed home care agency is required (most policies require this).
Step 3: Contact the Insurance Company
Call the claims department (not general customer service) to initiate a claim. They will send you a claims package that typically includes:
- A claimant statement — describing the care needs
- An Attending Physician Statement — to be completed by the primary care physician
- A care authorization or plan of care form
- Instructions for approved providers
Step 4: Have the Physician Complete the Medical Certification
The insurance company will send forms to the physician — or you can bring them to the appointment. The physician certifies that the person meets the ADL or cognitive impairment criteria for triggering benefits.
Step 5: Care Assessment
Most LTCI companies send a registered nurse to conduct an independent assessment of the claimant's care needs. This visit is part of the claims process and typically takes 1–2 hours.
Step 6: Approval and Benefits Begin
If approved, the insurer will confirm in writing: the approved daily benefit amount, the care settings covered, and how to submit for reimbursement. Most policies reimburse you for documented care costs up to the daily benefit limit. Some policies pay cash benefits directly.
Keep all receipts and invoices from care providers. Submit them according to the insurer's billing cycle.
Love Thy Neighbor Senior Care is a licensed home care agency that meets the provider requirements of most long-term care insurance policies. We can help document your care plan and work with your insurer's requirements. Call us at (402) 205-3016 — we help families navigate LTC insurance claims regularly.
If Your Claim Is Denied
Denials are not final. You have the right to appeal. Common reasons for denial include: the benefit trigger criteria not being fully documented, a care setting that isn't covered, or the elimination period not yet being met.
Request the denial in writing with the specific reason. If the physician's documentation was insufficient, ask them to resubmit with more detail about functional limitations. If the denial seems in error, consult a licensed elder law attorney or a long-term care insurance claims advocate.