Frequently Asked Questions - Employee Long-Term Care Insurance

Long term care is the assistance required by an individual who has a chronic illness or disability that leaves him or her unable to care for him- or herself for an extended period of time. Frequently, one receives long term care after one recovers. As much as possible from an accident or illness. Long term care may be provided in a residential care facility (e.g., an assisted living facility, a skilled nursing facility), an adult day care facility, or the individual’s own home. Such care includes both skilled nursing care and custodial care, and may be required by individuals of any age.

A survey of the caregiving members of the National Family Caregivers Association, performed in 1997, revealed the following1:

  • 61% of survey respondents spent 40 or more hours per week in caregiving activities.
  • 87% had been giving care for 3 years or more, and 28% had been giving care for 11 years or more.
  • 25% of caregivers expect to continue in this role for less than 5 more years; 31% expect to continue for five to ten more years; and 44% expect to give care for 11 or more additional years.

According to a study published in June 1997 by the National Alliance for Caregiving, 51.8% of caregivers were employed full-time and 12.3% were employed part-time. Only 35.6% were either retired or not employed.2 Clearly, the demands of caring for a family member will take their toll, no matter how willing you are to provide such care!

1 “Member Survey 1997: A Profile of Caregivers.” National Family Caregiving Association. n.pag. Internet. June 9, 2000. Available: http://www.nfcacares.org.
2 “Family Caregiving in the U.S.: Findings from a National Survey.” n.p.: National Alliance for Caregiving and the American Association of Retired Persons, 1997. 10. Internet. June 9, 2000. Available: http://www.caregiving.org/content/repsprods.asp.

Some of the most significant costs of providing home-based care cannot be measured in dollars; for example, consider the following statistics from the National Alliance for Caregiving1:

  • 25% of all caregivers say that they experience caregiving as emotionally stressful, while 15% report suffering physical or mental health problems as a result of caregiving.
  • 43% of caregivers report that caregiving has left them with less time for other family members than before.
  • 43% report having to give up vacations, hobbies, and other personal activities.
  • 49% of family caregivers who also worked reported having to change their work schedule to provide care (e.g., go in late, leave early, take time off during the work day), and 6% gave up work entirely.

Furthermore, it is estimated that the cost to business of caregiving in terms of lost productivity is between $11.4 and $29 billion per year.2

1 Family Caregiving in the U S.” 23, 22, 22, and 33, respectively.10. Internet.June 9, 2000. Available: http://www.caregiving.org/content/repsprods.asp.
2 “The MetLife Study of Employer Costs for Working Caregivers.” Metropolitan Life Insurance Company, 1997. 7. Internet. June 9, 2000. Available: http://www.caregiving.org/content/repsprods.asp.

Unless you have a net worth in excess of $5 million, chances are you should buy long term care insurance coverage. Costs for long term care can be significant, and statistics show that of 9.3 million Americans receiving assistance with activities of daily living or instrumental activities of daily living, 77% have been receiving care for more than one year and of that number, 29% have been receiving care for more than 5 years.1

By purchasing long term care insurance, you accomplish four key objectives:

  1. You provide yourself with greater control over how and where you will receive care. You are not limited by the options available through Medicaid.
  2. You reduce your dependency on family members, and avoid becoming a burden to them.
  3. You preserve your assets – very important if you will recover from this disability, or if you have a surviving spouse.
  4. You increase the likelihood that all of your needs will for assistance will be met. A government study found that “lacking the necessary assistance with ADLs, approximately one half of those in need experienced a serious negative consequence such as burns from bath water, weight loss, or being chair- or bed-bound.2

1 “Americans with Disabilities: 1994-1995. U.S. Census Bureau. Washington, DC:1997 Table 12. Internet. June 9, 2000. Available: http://www.census.gov/hhes/www/disable/sipp/disab9495/ds94t12.html
2 Health, United States, 1999 with Health and Aging Chartbook.” National Center for Health Statistics. Hyattsville, Maryland. 1999. 60.

A Long Term Care benefit will be paid to you if you become disabled according to the policy schedule. The amount of the monthly payment will depend upon:

  • The Long Term Care plan of coverage you choose;
  • Any options you choose; and
  • The place of residence used for long term care.

Plans of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community, or in the home.

You are eligible for a monthly benefit if you are assessed as suffering a covered loss of functional capacity and are unable to perform two or more Activities of Daily Living (ADLs) or cognitive impairment. You must be under the regular care of a physician according to the condition.

When you elect the Simple Growth Inflation Protection Option, your coverage will be increased by 5% of your initial amount on the January 1st following your enrollment, and each subsequent January 1st until your total amount of coverage is 200% of your initial coverage.

You may also apply for additional coverage at any time, by completing an Application for Long Term Care Application and providing Evidence of Insurability.

When you apply for additional coverage, with the Simple Growth Inflation Protection Option, your additional coverage will also be increased by 5% of the additional amount each subsequent January 1st.

The Lifetime Maximum Amount is the maximum amount the insurance company will pay you for all the long term care benefits. You have your own Lifetime Maximum Amount. It is shown in the Schedule of Benefits, and may be adjusted to include inflation option increases, if applicable.

To qualify for long term care insurance you must be able to answer “no” to all the following four questions:

  1. Do you use mechanical devices, such as:  a wheelchair, walker, quad cane, crutches, hospital bed, dialysis machine, oxygen, or stairlift?
  2. Do you currently need or receive help in doing any of the following: bathing; eating; dressing; toileting; transferring; maintaining continence?
  3. Do you currently have, or have you ever had a diagnosis for or symptoms of: (a) Alzheimer’s disease, dementia, loss of memory, or organic brain syndrome? Or (b) multiple sclerosis, muscular dystrophy, ALS (Lou Gehrig’s Disease) or Parkinson’s Disease?
  4. Have you been diagnosed or treated by a member of the medical profession for AIDS or the HIV+?

If any of these questions is answered “yes,” coverage is automatically denied.

Beyond these four questions, the long term care insurance application asks approximately 20 questions regarding the applicant’s medical profile and health history. Depending on Unum’s assessment of the applicant’s responses and (possibly) review of a statement from the applicant’s personal physician, coverage may be rated (i.e., premiums may cost more) or coverage may be declined.

No. Medical underwriting is based on your responses to approximately 24 questions regarding your medical profile and health history. In addition, Unum may contact your personal physician to obtain copies of your medical records.

If you are over age 70, you will also be required to complete a personal interview with a representative of the Company. This interview will relate to your medical history and will include a test of cognitive function.

Persons who may be eligible for the plan are active Employees and their family members. An active Employee is a person working on a full-time basis for regularly paid earnings, for a minimum of 30 hours per week, and the Employer’s usual place of business or at a location to which the person is required to travel. Temporary or seasonal employees are not included.

A family member means the spouse of an active Employee, the natural, adoptive or step-parents or grandparents of an active Employee, the natural, adoptive or step-siblings of an active Employee and his or her spouse, or the natural, adoptive, or step-children of an active Employee and his or her spouse. To be eligible for coverage, a family member must be between the ages of 18 and 80.

For Employees: after the Employee has completed the Waiting Period, the Employee may apply for the first 30 days (a period called the First Enrollment Period) without Evidence of Insurability. After the First Enrollment Period, the Employee may apply at any time, with Evidence of Insurability.

For the Employee’s spouse, and for Family Members: the Employee’s spouse and the Family Members may apply any time after the Waiting Period, with Evidence of Insurability.

The appropriate Benefit Election forms are available from your Plan Administrator.

Evidence of Insurability includes the information you supply on the Application for Long Term Care Insurance, and may include proof of your medical history, test results, medical exams, physicians’ statements. The insurance company may also require an insurability assessment, and will use all this information to determine whether to approve or deny an Application.

An insurability assessment means a review done by the insurer or its representative to help to evaluate your cognitive and functional status. It may be by telephone and/or an in-person interview at a location selected by the insurer or its representative.

For active Employees, coverage begins on the latest of the Plan effective date, on the first day of the month that occurs on or after the month in which you became eligible for coverage, or the first day of the month occurring on or after the date you applied for coverage. You will not have coverage if you are absent from work because you are injured, sick, temporarily laid off, or on leave of absence when coverage would ordinarily begin. Coverage will resume when you resume active employment.

For Family Members, coverage commences on the later of the Plan effective date, or on the first day of the month following the date the insurance company approves your Application. Family Members will not have coverage if totally disabled on the date coverage would ordinarily begin. For these purposes, Total Disability is the inability due to injury or sickness, to perform each of the duties or activities of a person of the same age and sex in good health.

  • The date the Summary of Benefits under the Policy ends;
  • The date you no longer are in an Eligible Class;
  • The date your class no longer is included for insurance;
  • The date your total benefit payments equal your Lifetime Maximum Amount;
  • The end of the period for which premiums were last remitted to the insurance company for your coverage;
  • The date you no longer are an active Employee with the company; or
  • You die.

This Group Long Term Care coverage is portable, meaning that you or your authorized representative may elect to continue your coverage on a direct billing basis, and to be paid directly to the insurance company. You may not elect portable coverage if you had chosen to premium payments stopped for your Group coverage. An election for portable coverage must be made within 31 days after the end of the Group coverage. The premium rate schedule and benefit levels will be those in then in force at the time of the election for portability.

Yes. You may apply for changes in coverage at any time, including after election for portable coverage, by completing an Application for Long Term Care which includes Evidence of Insurability.

If you are disabled at the time your coverage would become effective, you will not have coverage until you have resumed active Employment.

If you become disabled and your coverage terminates because of nonpayment of premium, you may request reinstatement of coverage up until five months after the termination date by providing proof that your disability occurred prior to the coverage termination date, and you must pay all unpaid premiums.

Premium payments are waived during the time in which you are receiving benefits and residing in a Long Term Care Facility, in an Assisted Living Facility, or when you are receiving benefits for Total Home Care.

While you continue to have a disability, the Insurer may suggest alternate care designed to help you regain the ability to engage independently in the activities of daily living or to regain cognitive function. Examples may include a rehabilitation program, home modifications for wheelchair access, or certain types of medical equipment or hardware purchases. The terms of such alternate care and the actual expenses will be subject to mutual written agreement, and the Insurer may pay reasonable expenses which are not otherwise payable by Medicare or other insurance. Such alternate care is not mandatory, and if you choose not to accept alternate care, your benefits will continue according to the provisions of your Schedule of Benefits.

The insurer will not cover you for pre-existing conditions. Other exclusions are:

  • Disabilities caused by war, declared or not, or any act of war;
  • Disabilities caused by attempted suicide, whether sane or insane, or other acts of self-destruction;
  • Disabilities caused by commission of a crime for which you have been convicted under state or federal law, or the attempt to commit a crime under state or federal law.
  • Disabilities or confinements when you are outside the United States, its territories or possessions for a period of over 30 days;
  • Any days over 15 days in a calendar year during which you are confined to an acute care facility (acute care is medical care obtained as a result of a sickness or injury requiring immediate medical intervention);
  • Disabilities caused by voluntary use of any controlled substance as defined by law, unless as prescribed by a physician; or • Disabilities caused by psychological or psychiatric conditions which include:
  • Depression;
  • Generalized anxiety disorders;
  • Schizophrenia; or
  • Manic depressive disorders,

whether treated by drugs, counseling, or other forms of therapy. However, the Policy will make payments for conditions that are not psychological or psychiatric in nature, including Alzheimer’s disease, multi-infarct dementia, or Parkinson’s disease.