How Long Term Care Insurance Made a Long Term Difference

When my father retired, his employer included a negotiated rate for a long term care (LTC) insurance policy as one of his benefits. It was $67 per month for the premium. He paid out $16,080 over 20 years that I am sure at times he resented, never imagining a scenario where it would be useful. Then, on June 7, 2012, things changed literally instantly. My parents were hit by another driver. Their car was totaled. They spent 7 weeks in rehab which was covered by their personal and bodily injury auto insurance. They were unable to ever return to their split-level ranch home. And I was suddenly in charge of their finances and realizing they had long been living only on social security and my father’s pension, no savings. 

While I was sorting through the insurance issues over the car and personal injury claims, a friend recommended that I talk to a co-worker about options. He asked me if my parents had long term care insurance, but I assumed they did not. Then, in leafing through files at the house in New York, I found a file labeled LTC, filled with paper statements of paid premiums. I am all about going paperless, but in this situation, I was thrilled to have my hands on all the information in one place. I showed it to my co-worker who used to be in insurance, but said there was no way it would cover them because they did not have major disabilities or terminal diagnoses. My co-worker encouraged me to file a claim. He said, “It does not count against you if they reject the claim, so you have nothing to lose. Just let them decide if it kicks in or not.” So I called that day.

They sent a nurse out to evaluate my parents and determine if they were eligible for a claim. She noted my father’s concussion and memory loss, as well as his compromised mobility and frequent falls (which were later diagnosed as Parkinson’s). She also noted my mother’s dependence upon her walker and that she required assistance to do most tasks like meal preparation and bathing as a result of the injury to her hand in the accident. The nurse decided that they were not going to improve much beyond the intensive therapy they had already received in rehab and that both qualified for the LTC benefits they had paid into all these years. I was sad about their limitations but thrilled that they had options now. 

The folks at the insurance company walked me through the paperwork and explained what would be required on my end. The way my parents’ policy was set up through my dad’s employer was that they each had a certain total dollar amount which either could be used to reimburse 80% of home care or 100% of assisted living costs. Once they reached that dollar limit, which was worth over 18 times what they had paid in, regardless of how much time that took, that was it. The reimbursement could only be paid to my parents, not the company providing care, so in order to use the money, I had to pay the bill first and then submit the bill to be reimbursed. So, every month I pay the assisted living directly and send the invoice to the insurance company. Then the LTC company deposits the reimbursement into my mother’s bank account and sends me a statement showing how much of the total claim is available after this deduction. 

It gave me space to breathe and figure out how best to handle the funds from the car accident settlement and the sale of their house of 40 years without having to eat into that immediately. It gave me the opportunity to let them stay together after almost 50 years of marriage even though they had very different levels of care in terms of activities of daily living assistance. It gave me peace of mind that I could invest the proceeds from the sale of the house and the accident, instead of keeping them liquid and burning through them with no actual plan for my parents outliving those funds. It gave me as an unmarried caregiver the option to keep them safe and in a community environment while I continued to work full time.

So, are there hoops to jump through? Yes. Do I wish the balance remaining when my father died in 2015 could have been applied to my mother’s policy? Absolutely. Is the stability of a quality care facility without frequent moves and availability of staff in emergencies and the friends with whom my mother eats her meals and my infrequent hamster-wheel thoughts about my mother’s finances worth some paperwork and a few phone calls? Undeniably. If you are not sure your loved one will qualify for their long term care benefits yet so you are holding off, don’t. Call as soon as possible and ask for an evaluation. The worst they can say is no. If you are of an age that you are considering LTC coverage for yourself, call this week.