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How To Choose A Long Term Care Insurance Policy Elimination Period


By: Duane Lipham


In a long-term care insurance (LTCI) policy the elimination period is often referred to as the policy deductible. In many ways it is similar to the deductible often used in major medical insurance policies. One significant difference is that a specified number of days that you will be responsible for your own care is used instead of specifying a certain dollar amount that you will pay initially for your own care expenses.

The most common choices are 30, 60, 90, 180 and 365 days, although it can vary from one carrier to another. So what is a reasonable choice for an elimination period?

Some well-intentioned popular financial authors recommend setting it as low as possible, perhaps even at zero. And it is true that the lower the elimination period selected the less you will most likely have to pay out when the time comes for you to begin receiving care.

On the other hand, low elimination periods can have a dramatic effect on the premiums that you pay throughout the life of the policy. So in many cases some form of compromise is necessary for the sake of affordability.

In making their decision about the elimination period, many keep in mind that insurance is often used as a way to avoid suffering catastrophic financial losses rather than insuring against every possible expense. And accepting a small portion of the risk involved can be an economical and reasonable choice for most people.

So in deciding the best elimination period for your particular situation, it is good to consider what the cost would be for the most expensive care that you may have to receive, and that is most often facility care. Once you have a good idea of the daily costs for facility care in your area, multiply them by the various elimination period choices to see what you feel is affordable for you. Then when you make the choice that fits your situation best, be sure to keep that amount of funds specially earmarked for the purpose of your care and allow it to grow so that it at least keeps pace with inflation.

These days very few carriers offer a zero day elimination period. This is especially true of the major carriers. The most common choices for an elimination period then are 30, 60, and 90 days. The choice of 180 or 365 days is most often made by those who have significant assets of their own. This helps them keep the cost of LTCI extremely low.

Even if one chooses a 90 day elimination period, the amount of funds that are put at risk is minuscule when compared to the asset protection afforded by the policy's total pool of benefits should care be required.

Using a little financial common sense can help you make a wise decision regarding the LTCI elimination period.

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