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How LTC Benefits Work

You pay a premium and then the policy pays for covered services when you need them, up to limits in your policy. Policies offer varying amounts and types of coverage. Most will pay for or reimburse policyholders a limited amount for qualified services.

Benefit Period

Policies normally pay benefits by the day, week, or month. You may choose a benefit period that is a specific number of days, months or years. A maximum benefit period may range from one year to the remainder of your lifetime.

It is important to ask if the benefit amounts will increase with inflation and if that coverage increases your premium.

Qualifications / Requirements for Coverage

Coverage is not guaranteed until you satisfy certain requirements. For example, you must be unable to perform two of the six daily living activities: dressing, bathing, continence, eating, transferring, and toileting.

Many policies further limit payment to qualified services consistent with a coordinated plan of care established by specific individuals under the policy.

Also, most policies have a benefit trigger for cognitive impairment. For example, you may only qualify for these benefits if you are unable to pass a mental functioning assessment.


Every policy has an exclusion section. Many LTC policies exclude coverage for:

  • Mental and nervous disorders or diseases (except organic brain disorders)
  • Alcoholism and drug addiction
  • Illnesses caused by an act of war
  • Treatment already paid for by the government
  • Attempted suicide or self-inflicted injury

Elimination Period

The number of days you must qualify under the policy before your policy pays benefits is called the elimination period. A shorter elimination period means a higher premium. Elimination periods can range from zero to 180 days.

Changing Policies

Before you change to a different long-term care policy, seek the advice of your present insurer, agent, or financial advisor. It is in your best interest to understand all the relevant factors involved in replacing your long-term care insurance policy.

Note that health conditions that are currently covered may not be immediately or fully covered under a new policy. A claim that is payable under your current policy may be delayed or denied under a new policy because you would need to satisfy a new waiting period.

Make sure that your application is complete and truthful concerning your medical history. Any inaccurate or omitted material medical information may affect how the insurer pays a claim.

How Premiums are Determined

The cost depends on the amount and type of care you need and where you get it.

Factors include:

  • Your age when you buy the policy
  • The maximum amount that a policy will pay per day
  • The maximum number of days or years that a policy will cover
  • The lifetime maximum amount that the policy will pay
  • Any optional benefit you choose, such as benefits that increase with inflation
  • Policy exclusions