The primary goal of this website is to assist families, business, and individuals with access to information and resources to make an informed decision when obtaining a long term care insurance policy. Individuals may view the features and benefit of a long term care insurance policies as being the same regardless of who the carrier or product might be. But, the reality is no two policies are every exactly alike.
For instance, every policy has an elimination period. The elimination period of a long term care insurance policy is the period of time you must wait to receive policy benefits once you become eligible. The elimination period options are typically 0, 30, 60, 90, 180, or 365 days. The shorter the elimination period, the more expensive your premium will be. Some carriers offer all of the above mentioned elimination periods, others only offer a few. Your elimination period is selected when you purchase your long term care insurance policy, and typically cannot be adjusted once the policy becomes active.
So far, all of this information is pretty basic and universal to all long term care insurance policies. Where the differences can become significant is a function of what type of elimination period the policy offers: calendar day or service day.
Calendar Day Elimination Period
A calendar day elimination period begins the day the insured qualifies as being eligible to receive long term care benefits. When the insured becomes eligible to receive benefits each subsequent day counts towards satisfying the elimination period.
For example, assuming you become eligible to receive benefits on September 1st, and your policy has a 90 calendar day elimination period you would begin receiving benefits 90-days later.
Service Day Elimination Period
A service day elimination period is very different than a calendar day elimination period. With a service day elimination period, once the insured becomes eligible to receive benefits, they are required to receive actual long term care services equal to the elimination period before benefits begin. Most long term care insurance policies with a service day elimination period will also require a minimum number of hours long term care services are received in any given day in order for it to count towards the number of days care was received.
For example, assuming you become eligible to receive benefits and your policy has a 90 service day elimination period, you would not receive benefits from the policy until you received and paid out-of-pocket for 90-days of long term care. If you received care every other day, your benefits would not be paid from the policy for 180 days.
In most cases a calendar day elimination period costs more than a policy with a service day elimination period. The differences between these two types of elimination period options will be greatest when an insured requires in-home long term care services. In situation where a long term care recipient requires home care they may not necessarily require care on a daily basis. With a service day elimination period this will extend the period of time by which the insured will begin receiving benefits. If an individual becomes eligible to receive benefits, and immediately enters a nursing home facility, there should not be a difference between a calendar versus service day elimination period because care will be received on a daily basis and benefits will be received at the same time.
Most policies with a service day elimination period either include or offer (at an additional cost) a zero day home healthcare elimination rider. If a long term care insurance policy has this rider the elimination period for home healthcare will be waived. This option can eliminate the concern of not be able to receive benefits until the service day elimination period requirements have been met. Most carriers also offer a zero day home healthcare rider for policies with a calendar day elimination period.
Regardless of which option you choose it is important that you know what you have prior to purchasing a policy. The worst thing that can happen to any insured is that they pay premiums for their long term care insurance policy over their lifetime, only to discover the policy doesn’t perform the way it was intended to perform. To learn more about your options please complete our long term care insurance quote request form or call us at (877) 402-2235.