What Is Long-Term Care Elimination Period?

Updated · Jun 18, 2022

The elimination period is one of the most important factors you need to consider when applying for long-term care insurance (LTC).

This determines how long you’ll wait after you make a claim and before you start receiving the benefits.

The duration of that period depends on several factors.

Learn what they are and how the long-term care elimination period affects the conditions of your policy.

What Is an Elimination Period?

An elimination period is the amount of time that has to pass before an insurance policy begins paying out benefits.

The aim is to discourage people from filing small, frivolous claims and give long-term care insurance companies time to process the requests.

Waiting periods can range from weeks to a year, depending on the type of policy. The longer the period is, the smaller the premium will be.

What Is Long-Term Care Insurance?

LTC is a type of insurance that helps cover the cost of long-term care services.

Even if it’s hard to imagine it now, the chances are you’ll need help later in life. With insurance, you’ll be able to take care of yourself without being a financial burden on your family.

So, how does long-term care insurance work?

You make payments for the duration of the premium term. You can claim the benefit if you need care.

The insurance company will review your request and grant you the funds after the elimination period.

You can use the money from the insurance for nursing home, assisted living, or home health care. The type of care covered depends on the policy.

But what if you never need these services?

You would've wasted thousands of dollars on something you've never used.

There are policies that combine long-term healthcare insurance with permanent life insurance.

If you want both types of coverage and can afford it, you can get this so-called hybrid insurance (also known as asset-based or linked benefit).

That’s one of the best alternatives to long-term care insurance.

What Is the Elimination Period for Long-Term Care?

The elimination period is the amount of time you must pay for long-term care services out of pocket before your insurance policy kicks in.

It can range from 30 days to a year—but the days you need help must be consecutive! They can't be dispersed through time.

For instance, if your policy’s elimination period is 30 days, you need to receive and pay out-of-pocket for a full month of care.

If it’s 30 days over the course of several months, you won’t qualify for the benefit.

Picking the Right Long-Term Care Elimination Period

In general, the longer the elimination period, the lower the premiums will be.

But before you rush into picking the cheapest option, think about what that means.

Will you be able to afford home care for 180 days?

Long-term care insurance is worth it, but you don’t want it to become a financial burden.

If your budget is tight now, but you expect your income to grow in the future, go for a longer waiting period.

But if you’re not sure you’ll have the funds to cover the costs of care, choose a shorter elimination.

According to experts, the optimal period is 90 days.

But ultimately, the best long-term care insurance conditions depend on your needs and preferences.

Criteria to Start Receiving LTC Insurance Benefits

There are a few criteria you must meet to qualify for long-term health insurance benefits.

First, the beneficiary must be under the age of 65 to apply for this type of insurance in the first place.

In addition, you must meet certain criteria to claim the benefit. Long-term care insurance covers care needed as a result of chronic illness, disability, or injury.

That said, not every condition qualifies. There are a few exclusions. LTC policies don’t cover damage caused by:

  • Alcohol or drug addiction
  • War
  • Injury due to self-harm or attempted suicide
  • Mental and nervous disorders or diseases
  • Expenses already covered by the government

Your long-term insurance will kick in if you need help with two or more daily activities (e.g., bathing, eating, dressing, and so on) or have a severe cognitive impairment.

If you cover these conditions, you can claim your benefit. If the insurance company approves your request, all you have to do is wait on the elimination period.

Wrap Up

The long-term care elimination period affects the cost of your insurance and when you’ll start receiving the benefit.

The longer the elimination period, the lower the premiums will be. But you’ll also have bigger out-of-pocket expenses.

That’s why it’s key to find the balance for your needs.

Aleksandra Yosifova
Aleksandra Yosifova

With an eye for research, Aleksandra is determined to always get to the bottom of things. If there’s a glitch in the system, she’ll find it and make sure you know about it.