Covered Services -- Primary Services and Additional Services—Under Long Term Care Policy

The provisions in the sample long term care insurance policy clearly state the specific conditions under which benefits will be paid. Most policies contain provisions similar to those outlined below.

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Conditions for Benefit Payments

We will pay for Covered Servicesonly if:

  1. They are Qualified Long Term Care Services;
  2. They are received after the Original Coverage Effective Dateof this Policy;
  3. They are received after satisfying any required Elimination Period;
  4. You are eligible for Benefits; and
  5. The Total Lifetime Benefit has not been paid.

However, Covered Servicesdo not include any service or supply which is primarily for personal convenience or companionship.

There are two types of Covered Services under this Policy: Primary Services and Additional Services.

COMMENT: These five conditions must be met in order for the insurance company to pay Benefits. They are self-explanatory. The insurance company will pay only for the Covered Services listed in the Policy: The Primary Services of Nursing Home, Assisted Living Facility, Respite Care, Home Care and Community Care, and the Additional Services of Needs Assessment and Informal Caregiver Training. These services must be provided for a person who is Chronically Ill (basically, someone who needs assistance to get through the day) and for whom a Licensed Health Care Practitioner has created a written Plan of Care.

Primary Services

On any day, you may receive one or more Primary Services. We will pay up to the applicable Maximum Daily Benefit Amount shown on the Schedule of Benefits page for actual charges You incur for Primary Services. However, the most We will pay for any combination of Primary Services You receive on any day is the highest Maximum Daily Benefit Amount associated with the Primary Services You receive that day. Payment of Benefits for Primary Services will reduce Your Total Lifetime Benefit.

COMMENT: For example, assume that you have purchased the following package of Primary Service Benefits under your long term care insurance policy:

Benefit

Nursing Home Assisted Living Facility Respite Care Home Care and Community Care TOTAL LIFETIME BENEFIT

On a given day, you incur the following expenses for long term care: Home Care Respite Care

Maximum Daily Benefit Amount

$125/day $100/day $100/day $100/day $150,000

$90 $70

Your Benefit under the Policy would be $125. You would receive credit for the full $90 of Home Care because that is within the $100 daily limit for Home Care. However, you would only receive credit for $45 the total Respite Care expense of $70 because the most the insurance company will pay for any combination of Primary Services is the highest Maximum Daily Benefit Amount shown on your benefits schedule, which happens to be $125. So the company will pay the $90 for the Home Care plus the difference between $125 and $70, or $35, toward the Respite Care.

If your Home Care expense for that day was $145 instead of $90, the insurance company would only pay $100 because that is the daily Home Care maximum. Then $25 would be applied toward to the Respite Care expense to reach your maximum $125 daily benefit.

Benefit payment for that day reduces your Total Lifetime Benefit to $149,875.