Elimination Periods in Long-Term Care Insurance: What You Should Know

Right at Home North Shore Long Island accepts all long-term care insurance policies. It is important to understand the terms of your policy so that you can maximize its utility.

Long-term care insurance is designed to provide financial assistance for those who require extended care due to age, illness, or disability. One key aspect of these policies is the elimination period, which determines when benefits will begin. Understanding elimination periods is essential for anyone considering long-term care insurance activation. In this blog post, we'll explore what elimination periods are, how they work, why they matter to policyholders, and how you can work with Right at Home North Shore Long Island to activate yours.

What is an Elimination Period?

An elimination period, also known as a waiting period or deductible period, is the time that must pass before one becomes eligible to receive benefits from their long-term care insurance policy. During this period, the policyholder is responsible for covering their care expenses out of pocket.

How Do Elimination Periods Work?

Elimination periods typically range from 30 days to one year, though some policies may have longer periods. Policyholders select the length of the elimination period when purchasing their insurance policy. A shorter period usually has higher premiums, while a longer elimination period may have lower premiums.

Once the elimination period has elapsed, the policyholder becomes eligible for benefits according to the terms of their policy. For example, if a policy has a 90-day elimination period and the policyholder requires long-term care, they will need to pay for their care expenses for the first 90 days. After this period, the insurance benefits start to help cover the remaining costs.

Types of Elimination Periods

Elimination periods are typically counted in one of four ways:

1. Service Day Elimination Period: Under a service day elimination period, the period is the number of days the insured receives covered care services. Each day that the insured receives covered care services counts towards fulfilling the elimination period requirement. For example, if the policy has a 90-day service day elimination period and the insured receives covered care services for five days per week, the elimination period would take approximately 18 weeks to complete (90 days ÷ 5 days per week).
2. Calendar Day Elimination Period: Under a calendar day elimination period, you measure the passage of time in consecutive calendar days. The elimination period starts on the first day the insured requires covered care services, and benefits become payable after the specified number of calendar days have passed. For example, if the policy has a 90-day calendar day elimination period, benefits become payable on the 91st day after the insured starts receiving covered care services, regardless of the number of days care was received per week.
3. Service Period Elimination Period:  This type of elimination period is based on the number of days of service within a specified period. It requires the insured to receive covered care services for a certain number of days within a set timeframe to satisfy the elimination period. For instance, if the policy has a 30-day service period elimination period, the insured must have services for at least 30 days within a consecutive 60-day period to fulfill the elimination period requirement.
4. Indemnity Period Elimination Period: Under an indemnity period elimination period, benefits become payable after the insured has received covered care services for a specified number of days, regardless of the period over which those days occur. Once the required number of days of care has been received, the elimination period is considered satisfied. For example, if the policy has a 90-day indemnity period elimination period, benefits become payable after the insured has received covered care services for a total of 90 days, regardless of how those days are distributed over time.

How Right at Home North Shore Long Island Can Help You

Elimination periods are an important part of long-term care insurance planning, determining when policyholders become eligible to receive benefits. By understanding elimination periods and considering their impact on premiums and benefits, individuals can make informed decisions when selecting a long-term care policy.

Right at Home North Shore Long Island will provide you with free guidance on how to effectuate your policy and manage any elimination periods therein. Recently, we worked with clients in Roslyn, Great Neck, Manhasset, Jericho, and Syosset who had elimination periods in their long-term care policies and were having difficulty understanding them. Our Director of Operations met with them separately in their homes, reviewed and explained the policies, and in one case, even called the insurance company together to ensure that the client was doing the right thing. If you have questions or would like us to review your policy, please call us at 516-513-1070.