Having an Elimination Period is quite common in long term care insurance. So what is it?
Let’s think of it this way. When someone buys most kinds of insurance, there is a deductible. With car insurance, for example, as a car owner pays for repairs, the first payments go towards the deductible amount. Once the deductible limit is reached then the insurance company will pay benefits as described in the policy.
Why is this important to understand? Because having different deductible amounts changes insurance premiums. When deciding on how much of a deductible to take on most people will consider the payments and what they can afford vs. the risk they are willing to take.
Back to long term care insurance, the elimination period is equivalent to a deductible or in more practical terms, the time when care begins before the benefits of the policy begin. The family, therefore, pays for care during that time. Once the elimination period ends, the family receives benefits outlined in the policy.
According to Investopia, an online investment website, it is common for shorter elimination periods, the carry more expensive premiums and, therefore longer ones to be less expensive. “Typically, most insurance policies have the most attractive rates for 90-day elimination periods. A policy with anything longer than 90 days, while less expensive, may not save you much for the extra risk you take on.”
Does someone in your family have long term insurance? Being aware of what a policy says is essential if you anticipate having to assist in his or her care. When you need help, it can take a great deal of time to get the ball rolling as there are many steps involved in starting an elimination period. Prepare for that by calling the insurance carrier to confirm what requirements are needed to get things moving when the time comes.
Be prepared for it to take more time than expected and for there to be times of frustration and confusion. Expect at least some of these hoops to jump through:
- Paperwork and more paperwork
- Medical history
- Home visits with recommendation
- Doctor’s examination and recommendation
Finally, the more educated you are about any policy taken on by family members, the more prepared you will be and the better you can assist family members in need.