What Are the Activities of Daily Living for Insurance Purposes?

Make the most of your insurance with these definitions for daily activities

Caregiver helping man with activities of daily living
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As you age, you may find yourself in a situation where you have trouble doing basic household activities you always had the ability to do yourself. Insurance companies that provide long-term care insurance have defined these tasks as "activities of daily living" and use them to determine whether you qualify for benefits under the terms of the insurance policy.

Types of Activities of Daily Living

Daily living activities are routine tasks that individuals must carry out every day to take care of themselves. The tasks fall into six main categories:

Eating

This refers to the ability to feed one's self.

Bathing

This category covers bathing and showering and various personal hygiene tasks, including grooming, oral care, and hair care.

Dressing

This activity of daily living involves choosing and wearing clothing.

Transferring

This refers to how well an individual can get into and out of bed or a chair without assistance.

Maintaining continence

This is the ability to control bladder and bowel functions.

Toileting

This is the ability to get on and off the toilet.

Older adults with sufficient physical and mental capacity to perform all the above activities of daily living independently can often thrive without caregivers. In contrast, people who cannot carry out these activities on their own may benefit from home care, home health care services, or assisted living because they would experience a reduced quality of life and an increased risk of injury or illness by living solo.

As with other health care expenses, the costs of long-term care can be high, so individuals who need these services may choose to buy long-term insurance to help pay for the services.

Insurance Coverage for Activities of Daily Living

In general, you have to buy long-term care insurance before you require care, as the insurance requires medical underwriting. You can buy long-term care insurance through an insurance broker. If you need help, call a company like Amada Senior Care, which can help you navigate the selection of long-term care insurance.

Most long-term care insurance policy benefits kick in when an individual needs help with at least two of the six activities of daily living. But each long-term care insurance company has a specific definition of the activities of daily living, so refer to your policy to get the details on what criteria you need to meet to become eligible for benefits.

Many companies, like Visiting Angels, will send a representative to your home to conduct an evaluation and to develop what is called a “plan of care.” The evaluation helps determine what activities of daily living you need assistance with and coordinates your needs with the benefits provided by your long-term care insurance.

Example: Joy needs help with getting dressed and preparing meals. Since she needs help with two out of the six activities of daily living covered by her policy, she should call her long-term care insurance company to find out if she can use her insurance to pay for someone to come to her home and help her with these tasks.

Depending on the policy, there may be an "elimination period," or a waiting period, anywhere from 30 to 120 days from the time you start to receive assistance with activities of daily living and the time you can collect benefits from the policy. In addition, most policy place a cap on both the period of years over which you are eligible to collect benefits and the total benefit amount you are eligible to receive over your lifetime. When shopping for long-term care insurance, it's important to evaluate your current and potential future health alongside these restrictions.

A policy with a longer elimination period can put you on the hook for out-of-pocket costs for a longer period. Make sure you have the funds to weather that period or choose a policy with a shorter elimination period.

Choosing Daily vs. Monthly Reimbursement Plans

Long-term care insurance policies typically offer daily or monthly benefit structures. Choosing the option that aligns with your intended care will allow you to minimize your out-of-pocket health care costs.

Daily policies pay up to a set daily maximum each day—$50 to $500, for example—that the beneficiary can then use to pay for services that aid in activities of daily living. This option may be useful for someone who only needs care a few days of the week and has a clear idea of what that care will cost.

Monthly policies pay up to a certain set amount every month regardless of how many days of care you receive that month. This option is useful for seniors who receive home care.

Example: Carl's policy provides a daily benefit of $200. He enlists the services of a home health aide for help bathing and dressing every day. The home health aide charges $40 per hour. On Mondays, he also likes to have his meals prepared for the week and get the laundry and cleaning done. The cost of services performed on Monday is $300. Carl would exceed the daily policy maximum on Monday and would have to pay $100 out of pocket. However, his costs might be under the limit on other days.

A monthly reimbursement policy might be preferable because the insurance company would pay up to the monthly maximum of $6,000 per month ($200 x 30 days), which would cover the higher cost on Mondays and grant Carl greater flexibility in scheduling the services he uses.

If you have ongoing health care needs, or can't anticipate your long-term care costs in any given week, a monthly benefit structure may cost you less out of pocket than a daily plan.

Paying for Care for Daily Living Activities

If you or a loved one anticipate needed assistance with everyday tasks in the future, shop for long-term health insurance now to avoid being turned down later.

If you are an existing policyholder who is struggling with daily activities of living, check your long-term health insurance policy to see if you qualify for financial assistance. If insurance won't cover the items needed, you can always pay for in-home care out of pocket, just as you would pay for any other service.

If you don't have and can't afford insurance, and don't have the financial resources to pay as you go, look for other ways to pay for assisted living costs. There are ample community resources and local non-profit organizations ready to help; looking them up through your local Area Agency on Aging is the easiest way to find them.