Almost every tax-qualified long-term care policy uses the same test to decide when benefits begin: can you perform your activities of daily living (ADLs) without substantial help?
The six ADLs
- Bathing
- Dressing
- Eating
- Toileting
- Continence
- Transferring (moving in and out of a bed or chair)
The benefit trigger
Benefits are generally triggered when a licensed health care practitioner certifies that you need substantial help with at least two of the six ADLs for an expected period of at least 90 days, or that you need substantial supervision because of a severe cognitive impairment such as Alzheimer's disease.
After the trigger
A plan of care is written, and most policies have an elimination period, a waiting period often between 0 and 90 days, before benefits are paid. Some count only days you receive paid care; others count calendar days.
Questions
Does dementia qualify for long-term care benefits?
Yes. A severe cognitive impairment that requires substantial supervision is a benefit trigger on tax-qualified policies, even if you can still physically perform your ADLs.
What's an elimination period?
It's the waiting period between when you qualify and when benefits start, similar to a deductible measured in days. Zero-day elimination periods are available on some hybrid policies.