A practical guide to reading a long-term care insurance policy: where to find the definition of the insured event, what the waiting period is, how long payment lasts, what the exclusions say, and how to tell whether the cover is a fixed benefit or indemnity.
You do not need to read it all — you need to know what to look for
A long-term care insurance policy is a long document, written in legal language, sometimes running to dozens of pages. Families open it, skim it and close it.
The good news is that there is no real need to read the whole thing. Five clauses determine almost everything relevant to a claim, and the rest is mostly technical provisions.
This page explains what the five clauses are, where to look for them and exactly what to check in each. If you go through them you will know more about your policy than most people who file a claim.
Clause 1: the definition of the insured event
This is the most important clause, and it is usually found in the definitions chapter or the cover chapter. It answers the question: when exactly does the policy start paying.
Two things to look for there. First — how many activities from the list of daily activities the insured person has to be unable to perform. In many policies it is three out of six, but this varies. Second — how cognitive incapacity is defined, and what is required in order to meet that definition.
Note also the precise wording of "unable to perform". Some policies require a complete inability, and others are satisfied with a need for substantial help. That difference is decisive in borderline cases.
Clause 2: the waiting period
The waiting period is the interval between the moment the long-term care condition existed and the start of actual payment. It usually appears in the benefits chapter or on the insurance details page.
The number itself matters, but the wording matters no less. In some policies the period is counted from the date the condition arose, and in others from the date the claim was filed or the date of recognition. The difference can amount to months of benefit.
If the period is counted from the date the condition arose, that is an excellent reason to document carefully when the condition began — and not to focus only on the filing.
Clause 3: the amount of the benefit and how it is calculated
Here you find the sum, and alongside it three details that change its meaning. First: whether the sum is index-linked. An older policy with a sum that is not index-linked is worth much less today than it appeared to be at the time of joining.
Second: whether there is a distinction between staying at home and staying in an institution, and what the rate is in each situation. Third: whether the benefit is a fixed sum or indemnity — that is, a set amount or reimbursement against proved expenditure.
If you find words in the policy such as "against production of receipts" or "subject to proof of expenditure", this is indemnity cover, and it completely changes what you need to collect.
Clause 4: how long payment lasts
A simple question with an enormous consequence: for how long will the benefit be paid once it has started. Some policies limit it to a period — five years, for example — and others pay for as long as the condition continues.
The difference between the two can be dramatic in financial terms, and it usually does not appear in the product name or the marketing material.
It is also worth checking whether there is an overall payments cap, and whether there is an age at which the cover ends.
Clause 5: exclusions, exceptions and the qualifying period
This is the chapter that is least pleasant to read, and the most important to know about in advance. It sets out situations that are not covered, and conditions that limit the cover during the initial period.
What to look for: a pre-existing medical condition exclusion, a qualifying period running from the start of the insurance, and specific exclusions for particular conditions or circumstances.
If you see an exclusion in the policy that looks relevant to your case, that is a point worth clarifying before filing rather than after.
You do not have the policy? This is how you obtain it
Most families do not hold the full document, and that is fine. You are entitled to receive it from the insuring body.
You can write to the insurance company or the health fund and ask for the full text of the policy that applied to the insured person during the relevant period. It is important to state the period, because terms change from year to year.
If you do not know who the insuring body is at all, start with the Insurance Mountain of the Capital Market Authority, and at the same time check old documents, standing orders in the bank account and the health fund's personal area.
- Write in and ask for the full text of the policy
- State the relevant period, not just the product name
- Ask for the insurance proposal and health declaration too, if they exist
- Keep confirmation of the request and of the date the documents were received
- Check the Insurance Mountain for any additional covers
Frequently asked questions
What is the most important clause in a long-term care insurance policy?
The definition of the insured event. It determines how many daily activities the insured person has to be unable to perform and how cognitive incapacity is defined — that is, when the policy starts paying at all.
How do we tell whether the policy is a fixed benefit or indemnity?
Look in the benefits chapter for wording such as 'against production of receipts' or 'subject to proof of expenditure'. If it appears, this is indemnity, and it completely changes what you need to collect.
Where do we find the waiting period?
Usually in the benefits chapter or on the insurance details page. It is important to check not only the length of the period but also from when it is counted — from the date the condition arose, from filing, or from recognition.
How do we obtain the text of the policy if we do not have it?
Write to the insurance company or the health fund and ask for the full text that applied during the relevant period. You are entitled to it. If you do not know who the insuring body is, start with the Insurance Mountain.
Is the sum in the policy index-linked?
It depends on the policy. This is a substantive point — an older policy with a sum that is not index-linked is worth less today than it appeared to be at the time of joining. The linkage mechanism has to be checked explicitly.
Official sources for further checking
This is general information and does not replace personal medical, legal or insurance advice. Eligibility is determined by the documents and rules that apply to each case.
