Article Series

New Short Term Care Insurance; Why Did I Buy It For Myself?

Article submitted by Raymond Smith, CLU, CLTC, MBA - The Long Term Care Specialist. Ray Smith can be reached at 303-699-4172 and visit his website:

A new kind of care insurance is emerging…short term or recovery care. Policies are less expensive than traditional long term care insurance and medical qualification is a little easier. What is it and for whom may it be appropriate?

Let’s first look at what short term care insurance does not do. It does not pay for extended care beyond a year.

Short term care insurance policies generally have very short Elimination Periods (can be thought of as the deductible…you will not be reimbursed for the “X” number of days). Depending upon the insurance company and your choice, the Elimination Period can be zero, 15, 20, 30, 60 or 90 days.

You select a maximum daily benefit from $50 to $300. Of course the higher the daily benefit, the more costly the policy. Benefit Periods (Usually the number of days for which you can be reimbursed for paid care. One company offers a “pool” of benefit dollars) range from 100 days to almost a year.

How sick or frail do you have to be before benefits are paid? The benefit triggers are similar to those of traditional long term care insurance. Typically, you need to be certified as needing help with at least 2 of the 6 standard Activities of Daily Living (bathing, dressing, eating, continence, toileting and transferring), or you have a “severe cognitive impairment”…think Alzheimer’s or other forms of dementia. Unlike traditional long term care insurance, a written plan of care is not required nor does the need for assistance have to last for 90 days.

Where may you receive care? All of the policies I analyzed pay for care in a nursing home. Most covered assisted living facilities. Home Care was different with each insurance company. One policy covers everything from companion/homemaker through Registered Nurse-level home care. Another only covers home care provided by a nurse or therapist (physical therapist, speech therapist, etc.). Yet another policy does not cover home care at all.

Who should consider applying for short term care insurance?

  1. Those with a “full” long term care insurance policy having a 60-day or longer Elimination Period. My own (and my wife’s) otherwise really good long term care policy has a 90-day Elimination Period. I became concerned about not being reimbursed for the first 90 days of care. Depending upon our care situation that could cost us tens of thousands of dollars. Contact me and I will tell you about the short term care policies we now have and why we selected them.
  2. People with roughly $20,000 - $60,000 in assets who want protection against the cost of care during a relatively short term recovery. They know this care would not be covered by medical insurance or Medicare.
  3. People who know they need full long term care insurance, but have waited too long to buy it. a). Because they have become older while waiting to apply, long term care insurance is no longer affordable. b). They no longer qualify medically for long term care insurance, but may still be able to obtain a short term care policy.

Short term care insurance, while very affordable, is not the complete answer to solving your long term care planning problem. But, as I was quoted in the Wall Street Journal on September 22, 2012, “Almost any…care insurance is better than no …care insurance.” (I actually said “long term care insurance”, but my statement applies to short term care as well.). Insurance that will pay $20,000 when you need care is going to give you $20,000 more than your current plan provides.

Very important: Short term care/recovery insurance policies are not standardized. They vary greatly. For your own peace of mind (and pocketbook), work with a specialist who can help you select a company and policy that will affordably cover the care that is important to you.

Raymond Smith, CLU, CLTC, MBA
The Long Term Care Specialist
Phone: 303-699-4172

Disclaimer: Actual policy language, rather than the contents of this article always takes precedence. Long term care insurance policies vary from company to company & within the same company. Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice. Consult your tax advisor or attorney for these matters.

About Raymond Smith, CLU, CLTC, MBA

A CLU (Chartered Life Underwriter), Ray has also earned the prestigious CLTC (Certified in Long Term Care) designation. His academic background includes a BS in Business Administration from Indiana University and a MBA from the University of Tennessee. Ray enjoys helping both individuals and businesses. As an independent broker, he searches multiple insurance companies to find the best fit and best value for his clients’ particular needs. Long term care insurance fills a gap in traditional benefit plans…most people do not know that health insurance, including Medicare, does not pay for long term care. For businesses, Ray can implement long term care insurance plans at little or no cost to the employer. Ray Smith is available for consultations and as a speaker for civic, religious, and other interested organizations. Learn more about Ray Smith by visiting his Linkedin profile <>.

Ray Smith is currently licensed in CO, DE, MA, NE, NM, OH, TX, WA and WY, he cannot respond to inquiries from other locations.

© 2012, All Rights Reserved by Raymond Smith, The Long Term Care Specialist

Posted November 2012 on