Long Term Care Insurance Elimination Period

The LTC elimination period is basically the deducible of the policy. It’s measured in the period of time (in days) that the policy holder will need to get care before benefits start streaming in. The elimination periods for the typical Long Term Care Insurance policies are: 0, 30, 60, 90 or 180 days. Keep in mind that these options will vary from one state to another. However, policies with a 90-day elimination period is the most popular deducible sold in the market today.

Elimination Period Options

A crucial question that floats when it comes to LTCI deducible is, “what’s the difference between calendar days and service days” in the elimination period.

Why Calendar Day Eliminating Period Might be Better

Calendar day LTCI elimination period entails this – after the benefits have been triggered, the number of wait-days is marked ‘on calendar’. If today is happens to be the first day of the month and you’ve got a 30-day elimination period, you’ll have satisfied the elimination period by 31st, regardless of whether your received care on 2 days, or through all 30 days.

Services Days

In service day elimination period, only the days when you actually receive care are counted. That means that if you had a 30-day elimination period, got care for two days a week, you’d need at least 55 weeks to meet the elimination period. This translates to 105 total days.

Monthly vs Daily Benefits

Compared to daily benefits, monthly benefits happen to be superior. Consider the following situation.

  • You have a $4000/month benefit.
  • Let’s say you need care 4 days in a week, costing $180/day.
  • On the average month, you’ll spend a total of $3060 (4 days a week = 17 days of service each month @ $180 per day).
  • With monthly benefits, this amount gets fully reimbursed. But with daily benefits, they’ll only reimburse $2210 ($130 x 17) of the total cost. Daily benefits will only pay $130 each day, which means you have to pay the remaining balance of $50 daily out of pocket.

Plans with monthly benefits do not care how much is spent on any single day, it only focuses on the end-month total.

Note that monthly benefits will cost you 3-5% (on average) extra with nearly all policies. That means you’ll be paying extra premiums each year, which might not make sense to some of us. Were it free, it would certainly be worth it.

Should I get Calendar Days Elimination period?

Is it important to have calendar day as your selected elimination period? To some people, the prospect of paying through 30 or 90 days of care (regardless of how much actual time this takes) is no big deal.  They know that whatever the case, their long term costs are insured. To others though, this time-frame can be more important. It all depends on your specific situation and preference.