What long-term care covers
If you get these services somewhere other than a hospital's acute care unit, LTC insurance usually covers them:
- Diagnostic
- Preventive
- Therapeutic
- Rehabilitative
- Maintenance
- Personal care
LTC insurance usually pays benefits when you can't do two or more of the following things on your own. These are called activities of daily living (ADLs):
- Bathe
- Go to the bathroom
- Eat
- Dress
- Transfer (such as getting out of a chair or bed)
- Control your bladder or bowels (continence)
You may be able to add LTC insurance to your life insurance or annuity policy. However, some additions to your life insurance don’t qualify as LTC insurance under state law RCW 48.83.020. See a list of companies approved to sell LTC insurance in Washington state.
You can use our long-term care options workbook (PDF 2.12MB) to determine the right type of care for your situation or read our consumer guide to long-term care insurance (PDF 381.77KB).
Coverage that qualifies as long-term care insurance
We consider coverage to be LTC insurance if their benefits meet certain requirements.
To qualify as LTC insurance in Washington state, an addition to your life insurance or annuity policy must pay benefits to cover long-term care services. If its benefits pay for long-term care services instead of paying you directly, it's still LTC insurance. This means it must follow most of our requirements for LTC insurance.
LTC insurance also includes “qualified” long-term care insurance you add to your to life insurance. Qualified long-term care allows the policyholder to potentially deduct a portion of their premiums paid as a medical expense on their tax return and receive tax-free benefits when they claim against the policy. This is also called federally tax-qualified long-term care insurance. It meets the requirements of sections 7702B(b) and (e) of the internal revenue code of 1986.
Coverage that doesn't qualify as long-term care insurance
Life insurance sometimes includes an accelerated death benefit. This does not qualify as LTC insurance. Instead, this is when the death benefit of your life insurance slowly reduces and changes to cash payments after you're diagnosed with a terminal illness. To qualify as LTC insurance, an accelerated death benefit must comply with all the long-term care rules. If it qualifies, it will have long-term care services in its name. An example is an “Acceleration of Death Benefit for Qualified Long-Term Care Services.”
Critical illness coverage doesn't qualify as LTC insurance in Washington state. Like an accelerated death benefit, it turns the value of your life insurance or annuity policy into cash payments if you're diagnosed with a chronic illness.
Under WAC 284-23-620, these two types of coverage are called accelerated benefits. You get these benefits after certain events in your life. This is different from LTC insurance, which requires you to no longer be able to do two or more ADLs. We determined that accelerated benefits don't qualify as LTC insurance. This is because you get the benefits and don't need to spend them on long-term care services. Under Washington state law, insurers can't sell or advertise accelerated benefits as LTC insurance.
If you're still unsure if your coverage qualifies
Ask your insurer if the coverage you have or want complies with the Washington Insurance Code (Title 48), Washington Administrative Code (Title 284). You can also check if they're an approved company through the OIC or Insurance Interstate Product Regulation Commission (IIPRC).
If your insurer filed your coverage with the IIPRC under the “Individual Standards for Accelerated Death Benefits” (ACCDB) standards, it's not LTC insurance.
If your insurer filed your coverage with the IIPRC under “Individual Long Term Care (iLTC) Uniform Standards, it's LTC insurance.