The Insurance Buying Guide: Qualifying for Benefits
Early LTC policies normally required a period of prior hospitalization before you would be eligible for benefits. This prior-hospitalization requirement also is referred to as a gatekeeper mechanism.
Many of these policies required at least a three-day stay in a hospital due to sickness or an accident before you would be eligible for LTC benefits. In addition, admission to the long-term care facility had to occur within a specified period of time following discharge from the hospital (for example, within 30 days). So, if you were hospitalized as a result of sickness or an accident for at least three days and were admitted to a nursing home within 30 days of discharge, you were eligible for LTC benefits.
Newer LTC policies no longer require prior hospitalization as a condition for receipt of benefits. In fact, many states have passed laws that prohibit LTC policies from having this type of gatekeeper mechanism.
Some of the newer LTC policies base eligibility for admission to a nursing home on the inability to perform some of theactivities of daily living. These contracts do not require prior hospitalization, nor do they require that you be admitted to a nursing facility as a result of sickness or injury. For example, if you are unable to take care of your personal hygiene or unable to walk or "get around," you would be eligible for admission to a nursing home and payment of policy benefits.
Federal legislation enacted in 1996 -- the Kennedy-Kassebaum Act -- which expands the tax advantages for purchasers of LTC insurance, also raises the thresholds for disability (for example, by eliminating "walking" from the list of qualifying ADLs). Laws in your state may supersede this legislation, however. An insurance agent or salesperson will be able to explain what will or will not trigger benefits under a particular policy -- and your state insurance department can let you know if your state requires insurance companies to provide coverage if you become unable to walk.
