Taking Care of Mom and Dad: Special Provisions

The amount of daily/annual benefit coverage, years of coverage, amount of home care coverage, waiting period before benefit begins and inflation rider options also vary by contract.

Home care coverage is usually available at the 50 percent, 80 percent or 100 percent level of the base nursing home-care coverage. This is the most important variable area. If home care is a priority, it is important to factor the different level of home care coverage into any comparison of premiums between different company proposals. A home-care rider has an incremental cost for the extra years purchased for this purpose, which amounts to about 30 percent of the base nursing home cost.

As in health and disability insurance, LTC claims can be paid on either a reimbursement or an indemnity basis. In a reimbursement policy, an insurance company reimburses a licensed agency for custodial aid services or a nursing home up to but not more than a policy benefit limit. In an indemnity policy, the full coverage is paid directly to the policyholder.

The specific definition of activities of daily living varies from policy to policy, but -- as I mentioned before -- inability to perform two or more ADLs is the usual qualification for LTC benefits. Contracts also vary slightly on extra areas such as respite care or day care, reimbursement for certain home equipment, starting time period for a waiver of premium payments and waiting time periods after an interruption in LTC services.