Long Term Care: Comparing LTC Policies | Department of Financial Services

comparison of ltc policies

All individual policies covering long-term care services in New York State must guarantee renewal. guaranteed renewable means that you have the right to continue the policy as long as premiums are paid on time. an insurer cannot terminate the policy if your health worsens. The insurer also cannot make any changes to any provision of the policy while the insurance is in force without her consent. however, an insurer can change the premium. An insurer cannot change the premium charged for the policy unless it receives the department’s approval and applies to all members of a class covered by the policy.

All policies that cover long-term care services impose certain limits on benefits and may exclude certain benefits entirely. When choosing a policy that best meets your own personal needs, it is important to understand the benefit limitations and exclusions that are included in these policies. The most common exclusions and limits used in insurance policies covering long-term care services are described below:

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Policy Maximum Benefit: The policy maximum benefit is the time period or dollar amount limit for which long-term care benefits will be paid under the policy. Insurance policies that cover long-term care services contain maximums of one to ten years, lifetime benefits, or a dollar amount limit. Most policy maximum benefits with dollar amount limits are calculated by multiplying the number of elected benefit years, times 365 days, by the elected daily benefit amount. once the benefit limit or time limit is reached under these policies, no further benefits will be paid for your continued need for long-term care services. It is important to note that in some long-term care policies, the maximum policy benefit is not the same for all benefits listed in the policy. For example, some nursing home and home care policies have separate maximum benefits for nursing home and home care. certain policies also contain a separate benefit limit for each particular period of care (generally successive days of care in a nursing home or while receiving home care without a break in care for a period of time specified in the policy).

Waiting or Elimination Period: The waiting or elimination period is the number of days you must receive long-term care services before benefits are paid under the policy. during the elimination or waiting period, you will have to pay privately for the care you receive. a new waiting period or waiting period may be imposed for each care period. shorter periods increase the cost of coverage. Different policies count deletion periods differently, so review the policy language carefully. some policies may require you to receive formal long-term care services every day for the day to count toward the elimination period.

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Pre-Existing Condition Limitation: A pre-existing condition is a condition for which a licensed health care provider gave or received medical advice or treatment recommendation within six months prior to the effective date of coverage. of the insured person. Some of the policies that cover long-term care services contain a pre-existing condition limitation. this limitation is the period of time after the policy is purchased that benefits will not be paid for care related to the pre-existing condition. some policies apply pre-existing condition limitations only for medical conditions not reported on the application. therefore, it is very important that you answer all questions on the application as completely as possible. Policies covering long-term care services cannot contain a pre-existing condition limitation of more than six months after the effective date of coverage.

Policy Exclusions: Specific exclusions are listed in all long-term care policies. Some of the most common exclusions in policies that cover long-term care services are:

• mental illness, however, the policy cannot exclude or limit benefits for Alzheimer’s disease, senile dementia, or demonstrable organic brain disease.
• intentionally self-inflicted injuries.
• alcoholism and drug addiction.
• government nursing facility care unless a charge is made that you are required to pay.
• coverage while the insured is outside the united states and its possessions.

Daily benefit amount: Most policies that cover long-term care services sold today do not cover the full charge of a nursing facility or home health care agency. Each indemnity policy limits payment to a daily benefit amount, which is the dollar amount payable per day based on the type of care provided. any charges above the daily benefit amount must be paid by you. Many indemnity policies cover provider charges up to the daily benefit amount.

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