Long Term Care Insurance Checklist: What to Review in Your Parent's Policy

Your parent has a long-term care insurance policy. That's better than most families — only about 7% of adults over 65 have one. But owning a policy and understanding what it actually covers are two very different things. Most families don't read the policy until the day they need it, and by then the elimination period, benefit triggers, and coverage caps come as unwelcome surprises.

This checklist helps you review the policy now, before a crisis, so you know exactly what you're working with.

Step 1: Locate the Full Policy Document

The summary card your parent keeps in a drawer is not the policy. You need the complete contract, which details the benefit triggers, exclusions, elimination period, daily or monthly benefit amount, and total benefit pool. If your parent can't find it, call the insurance company directly with the policy number and request a full copy.

While you're on the phone, confirm:

• [ ] The policy is active (premiums are current)
• [ ] The policy owner's name and address are correct
• [ ] The company has your contact information as an authorized representative (you may need to submit a HIPAA release or power of attorney to be listed)

Step 2: Understand the Benefit Triggers

Long-term care insurance pays out when the insured meets specific clinical criteria — not just because they moved into assisted living. Most policies use one of two triggers:

ADL trigger. The insured needs substantial assistance with at least two of the six Activities of Daily Living: bathing, dressing, toileting, transferring (moving from bed to chair), continence, and eating. "Substantial assistance" typically means hands-on help, not just reminders.

Cognitive impairment trigger. The insured has a severe cognitive impairment (such as Alzheimer's or other dementia) that requires substantial supervision to protect them from threats to health and safety.

Check your parent's policy for exactly which definition it uses. Some older policies require assistance with three ADLs instead of two, or define cognitive impairment more narrowly.

Step 3: Know the Elimination Period

The elimination period is the number of days after a qualifying event before the policy starts paying. It's essentially a deductible measured in time instead of dollars. Common elimination periods are 30, 60, or 90 days.

During the elimination period, you pay for care out of pocket. For a nursing home at $10,000 per month, a 90-day elimination period means roughly $30,000 in expenses before the policy pays a cent.

• [ ] Document the elimination period length
• [ ] Calculate the out-of-pocket cost at current care rates for that period
• [ ] Confirm whether the elimination period resets if the parent recovers and then needs care again (most policies include a "reset" provision)

Step 4: Review the Benefit Structure

Daily or monthly benefit amount. The maximum the policy will pay per day (or month) for qualifying care. If the actual cost exceeds this amount, you pay the difference. A policy that pays $150/day sounds adequate until you learn that the average private room in a nursing home costs $300+/day.

Benefit pool. The total amount the policy will pay over its lifetime, usually expressed as a dollar total or a number of years. A policy with a $200/day benefit and a 3-year benefit period has a total pool of roughly $219,000. Once exhausted, the policy stops paying regardless of ongoing care needs.

Inflation protection. The most important feature to check. A policy purchased 15 years ago at $150/day without inflation protection is now covering roughly half of actual costs. Policies with compound inflation protection (typically 3%–5% annually) increase the daily benefit each year. Simple inflation protection increases it by a fixed dollar amount.

• [ ] Document the current daily/monthly benefit amount (including any inflation adjustments)
• [ ] Document the total benefit pool or benefit period
• [ ] Confirm whether the policy has inflation protection and what type

Step 5: Verify Covered Care Types

Not all policies cover all types of care. Check which settings are included:

• [ ] Nursing home (skilled nursing facility)
• [ ] Assisted living facility
• [ ] Memory care unit
• [ ] Home care (by licensed agencies)
• [ ] Home care (by independent caregivers) — many policies exclude this
• [ ] Adult day care
• [ ] Hospice care

Also check whether the policy requires care to be provided by a licensed agency. Some policies won't cover a private caregiver hired directly, even if that person is a certified nursing assistant. This distinction matters enormously if your parent wants to age in place with in-home care.

Step 6: Check for Exclusions and Limitations

Common exclusions in long-term care policies:

• Pre-existing conditions (usually waived after the first 6–12 months of coverage)
• Self-inflicted injuries
• Mental illness (some older policies exclude dementia under this provision — a significant gap)
• Care provided by family members (some newer policies allow family caregiver payments; most don't)
• Care received outside the United States

Step 7: Prepare for the Claim

When the time comes to file, you'll need:

• [ ] A physician's certification that the parent meets the benefit trigger criteria
• [ ] Documentation of the care plan (who provides what, how often)
• [ ] Invoices or receipts from the care provider
• [ ] Completed claim forms from the insurance company

Start the claim process as soon as the parent may meet the policy's criteria, and ask the insurer when the elimination period begins and how it is calculated.

Keep the Policy in the Binder

Your parent's long-term care insurance policy should be part of their organized document system — not stuffed in a drawer where no one can find it when it's needed. The Caregiver's Legal and Financial Binder includes a financial account inventory section where you can record insurance policy details, coverage specifics, and the claims phone number, so the information is immediately accessible to whoever needs it.

Review the policy annually — even just a 15-minute scan to confirm premiums are paid, benefits haven't changed, and the insurance company's contact information is current. A policy that lapses because of a missed premium after decades of payments is one of the most painful outcomes in eldercare planning.