Explaining the ABCs of ADLs to Clients

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No long-term care insurance (LTCI) agent wants to hear a client say, “What do you mean I won’t qualify for benefits? I’ve been paying for this policy for years!”

Reactions like this often result from misunderstandings regarding several aspects of the coverage: the definition of the activities of daily living (ADLs), the way LTCI benefits are triggered and the 90-day requirement. Phyllis Shelton, president of LTC Consultants in Hendersonville, Tennessee, addresses these items by educating prospective clients when she first speaks with them. She starts by explaining what it takes for the contract’s benefits to be paid; that explanation includes reviewing the requirement that an individual must need help with two of the six ADLs.

“If you need care physically, then your doctor or health care practitioner tells the insurance company that you are expected to need help with at least two of the basic six activities of daily living for at least 90 days,” Shelton tells buyers. “These are things we all do: bathing, dressing, moving from Point A to Point B, and toileting, continence, eating. Usually it’s bathing and dressing, followed soon thereafter by just transferring.”

Understanding the 90-day Requirement

Brian Gordon, CLTC, president of Maga Ltd. in Riverwoods, Illinois, also walks applicants through the details of the ADL definitions. Most buyers understand that aspect of filing a claim, he says, but they often have difficulty grasping the 90-day duration requirement. He tells them that benefits are paid for conditions that are expected to last at least 90 days, and that’s when they get confused.

“They think the 90-day elimination period is what we’re referring to when we say the problem is going to last 90 days or longer,” Gordon says. “So we have to kind of back up to the beginning a lot of times and explain to them that the elimination period is one thing. You could have a 30-day elimination period, but you still need to have that 90-day certification by a licensed health care practitioner.”

Shelton gives buyers examples of illnesses or injuries that aren’t likely to last 90 days to help them with the concept. For example, she asks if they believe a broken hip would qualify and finds that most people know typical recovery times from that surgery are much less than 90 days. “And I’ll let people answer and they go, ‘No, because that’s taken care of in a few weeks now,’” she says.

Shelton also cites cases that are more likely to qualify as long-term claims, such as someone who is hit by a drunken driver and suffers multiple fractures. Similar anecdotes help her correct the misperception that only the elderly experience claims-qualifying incidents.

These examples also lead to a discussion of cognitive impairment and the qualifying requirement that the person can’t be left alone. Buyers typically associate cognitive impairment with Alzheimer’s or dementia, but Shelton points out that other conditions can qualify as well. “It could be a brain tumor; it could be a head injury from an accident,” she says. “But either way, you’re at the point that you can’t be left alone.”

At that point Shelton asks buyers if they have any questions about the benefit. Some do, she says, but the examples usually make the filing requirements clear. Gordon also believes that extensive upfront explanations reduce the risk of pre-claim disputes.

“We don’t have clients calling us up for the short-term benefits because we spend a lot of time educating them that the short-term problems — the hip, the knees, the back, things that you’re going to recover from within 90 days — would normally be addressed by your health insurance or Medicare,” he says.