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Get to Know the Tricks in Long Term Care Insurance Elimination Period

Determining a particular elimination period is complicated. Both long and short elimination period have its effect on the premiums. The worst part is companies define elimination period differently.

Elimination period in its simplest definition is the period when a person has to pay long-term care services out of his or her personal resources and assets before the insurance takes over. The period for most policies ranges from 0 to 100 days. It has been said that shorter elimination period can give higher long term care premiums. Otherwise, choosing longer elimination period for cheaper premiums could mean costly out-of-pocket expenses to cover the elimination period. If you go either for longer or shorter elimination period, you must have enough reserves aside from your insurance to prevent future dilemmas.

The Tricky Part

Many insurance companies use this scheme to save on the days they have to pay for claims. You can buy zero-day elimination, but most agents will ask you to purchase a 90 day elimination period. The 90 day elimination is derived from the 100 day period of Medicaid coverage.

Elimination period is tricky in a sense that it is defined differently in most policies. Some financial experts surmised that elimination period system is designed to shun claims. Here are some of the conflicting definitions of elimination period:

1.       Most policies describe a day of elimination as day when paid care services are performed, but others describe it as a calendar day without any particular care

2.       Some policies, particularly 2-pool policies, have two mutually exclusive elimination periods. Both periods should be met

3.       Some policies only require once-in-a-lifetime elimination, but others require for each new circumstances

4.       Some policies waive elimination for home care but require it to be used under facilities care, but some will allow waived days as qualified facility elimination

5.       Some policies oblige the elimination period to happen in a definite calendar period, otherwise you make a fresh start

6.       Home care for some company only take few days a week, and meeting 90-day elimination periods means up to six months or longer. These companies consider only the minimum number home care days even though the actual stay were less.

7.       A policy longer than 90-day elimination period, although less expensive, may not be beneficial. Some companies require the person to stay in a facility or become disabled for consecutive days to consider this as a qualified elimination period. So say your elimination period is 90 days, you need to stay in hospital or remain disabled for 90 consecutive days

How Much is Needed for Elimination Period?

The best way to determine which elimination period will suit you is to find out your overall expenses during that period. You should know the average daily costs of facility care in your area. Multiply the cost to the number of days in your elimination period, and the total costs will be your overall expenses.

The Bottom Line

The type of elimination period is treated differently from one person to another. It depends on the assets you wish to protect and the price you are targeting for the monthly premiums. A reliable LTC company or agent should help you understand the policy, lay out plans and determine the costs of nursing homes in your area for you to be able to choose the best elimination period.

Article Tags: Long Term Care, Long Term, Term Care, Elimination Period

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