How To Trigger a Long Term Care Insurance Claim
With most policies, a claim can be triggered in one of two ways. Either you have a severe cognitive impairment, or you have a loss of two of your activities of daily living (ADLs). The ADLs are bathing, dressing, toileting, transferring, continence and eating. For most people, bathing and dressing are the first to go. Typically, you lose the ability to perform ADLs in the reverse order you learnt them as a child.
LTCi Claims with Tax Qualified Policies
In a Tax Qualified policy, your ADL loss must be certified by a licensed health care practitioner to be expected to last at least 90 days. This language is very common throughout the industry because 99% of the policies being sold are now Tax Qualified. In Non-Tax Qualified policies, you will see some of the language differ. However, there is also no clarity in the law in reference to the tax consequences of Non TQ benefits. This uncertainty has caused most carriers, agents and consumers to shy away from this type of contract.