When you purchase a long-term care insurance (LTCI) policy you are entering into a contract with an insurance company. This contract is written in so- called plain English. And it is very important that you know the terms of the LTCI policy so you are not surprised later.
One of the biggest problems with LTCI policies comes from two little words? 'and' and 'or.' They may appear to be used interchangeably in the LTCI policy. But in reality, each time you see one of those little words, they can make a very big difference in your insurance coverage.
Here is why the difference between the two words is so critical. The two situations may seem the same, but the second one is far easier to meet.
- In order to qualify for benefits, the insured must be unable to perform two of our six activities of daily living AND must be under the care of a physician who certifies the need for LTC.
- In order to qualify for benefits, the insured must be unable to perform two of our six activities of daily living OR must be under the care of a physician who certifies the need for LTC.
(These two coverage examples are discussed in Society of Certified Senior Advisors, Working With Seniors, p. 222 (December 2003)).
The capitalized, bolded words are not going to be that way in the policy. To require someone be under the care of a physician who certifies the need for LTC and to have to prove you can't do the two activities of daily living may not sound like much. But it can actually be quite difficult.
For example, if your custodial care needs came about suddenly, you might not be under the care of someone who could help you meet the second criteria.
Then you could have to pay your own LTC expenses until a physician certifies your needs, and that could take time.
Securities offered through Cantella & Co., Inc., Member NASD/SIPC.