Long-term care coverage under two policies

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Dear Dr. Don,
I have two LTC, or long-term care, policies on myself. One was started 25 years ago as a payroll deduction, and I have continued to pay the annual premium after retiring. The other was started a few years ago via my financial planner. Each policy is with a different provider.

My questions are as follows: In the event I have to use long-term care, how should the claim payment be handled? Do I submit to both companies for copay or just one company at a time?

My concern is that the dual coverage provisions will allow both policies to use the same days in the “number of days covered.”
— Martin Multiple

Dear Martin,
It is impossible to answer a question like this without looking at all the particulars of the two policies and how they are structured. If the financial planner did a proper job of planning, the second policy should have been designed to supplement the benefits available under the first policy.

In some cases, it may be appropriate to apply for benefits from both long-term care insurance policies at the same time. In other circumstances, it may be appropriate to collect benefits from one policy first and then the other. There are also some circumstances where one policy might pay and the other may not.

For example, the older long-term care policy may provide nursing home benefits only, and the newer policy may provide benefits that include institutional care and home health care. In that case, only the newer policy will provide benefits if a person is receiving care at home.

All this adds up to you needing to sit down with a financial adviser who understands long-term care insurance and who can look at both policies. I’d recommend starting with the financial planner that counseled you to buy the second plan. Review the decision with him or her and discuss your concerns. Get a second opinion if you aren’t comfortable with how the policies work together to meet your potential long-term care needs.

Note: I’d like to thank Burton T. Beam Jr., a retired insurance professor who taught at The American College, for his help and insights in framing this reply.

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