Activities of Daily Living
These are everday functions and activities that individuals normally perform without assistance. They include bathing, continence, dressing, eating, toileting, and transferring (i.e. from a bed to a chair, or a wheelchair, etc.). Policies normally require that you are unable to perform a certain number of ADLs (usually 2 or 3 out of 5 or 6) before your are eligible for benefits.
Additional Cash Benefit
This benefit is a separate pool of funds that assists you in staying at home. The cash benefit is equal to a percentage of your Monthly Benefit or your Daily Benefit, and can be used to pay for a variety of long-term care expenses while you are receiving home health care. Benefits received may create a taxable event. Please consult your tax adviser.
Adult Day Care
Adult day is a program that offers social and health-related support services during the day in a community group setting to provide support for functionally impaired adults.
Alzheimer's Disease
A progressive and degenerative form of dementia which causes severe intellectual deterioration.
Assisted Living Facility
A residential living arrangement for persons who require assistance with activities of daily living. Facilities can vary in type of services rendered and size. These facilities provide an environment where persons can retain a relatively independent lifestyle.
Bathing
Getting in a tub or shower and washing oneself and getting back out.
Benefit Period
This is the time period for which you are purchasing coverage. Two, three, four, five, six and ten years and lifetime/unlimited coverage are some of the plans available.
Benefits
Payment to insured for coverage that the insurance company has received premium for.
Benefit Triggers
The criteria and methods by which the insurance companies determine eligibility to receive benefits.
Care/Case Management Services
Typically performed by nurses or social workers. They may work for an independent agency or be employed by a social service agency or other public program. Services that are provided are an assessment of the individuals needs so as to create a service plan, arrange services, and to coordinate and monitor the services received.
Chronic Illness
An illness that persists for a long period of time, or is permanent, leaves the individual with a residual disability, requires a long period of supervision and/or requires rehabilitation.
Chronically Ill
Term used in a "tax-qualified" long term carepolicy decscribing an individual who requires long term care due to the inability to do activities of daily living (ADLs) without assistance or due to a severe cognitive impairment.
Cognitive Impairment
When an individual has a deficiency in their short or long term memory, orientation as to person, place or time, deductive or abstract reasoning, and/or judgement in relation to safety awareness.
Community Based Services
Services available in one's community that are available to assist the elderly to live independently in their own homes.
Compound 5%/3% Inflation
Each year, your Daily or Monthly Benefit will increase by 5% and your Policy Limit will increase by 3% on a compounded interest basis.
Compound 5%/5% Inflation
Each year, your Daily or Monthly Benefit and your Policy Limit will increase by 5% on a compounded interest basis.
Continence
The ability to maintain control of bowel and bladder function, and if unable to maintain this control having the ability to perform associated personal hygiene which could include caring for a colostomy bag and/or a catheter.
Continuing Care Retirement Communities (CCRC)
A retirement complex that offers a broad range of services and levels of care.
Continuous Payment Option or Lifetime Payment Option
A premium payment option (usually the lowest premium available) that requires that you pay premiums until you trigger (are eligible) for benefits. Premium options are usually monthly, quarterly, semi-annual or annual. The policy is non-cancelable except in the instance of non-payment of premium. Companies can increase premiums however as long as they do so on the entire class of policies.
Custodial Care
Personal care that can be provided by an individual who does not have professional training to assist individuals with needs such as bathing, dressing, cooking and eating.
Daily Benefit
The daily benefit is the maximum dollars per day that the insurance company will pay. Currently this can average between $140 and $220 per day depending upon where you plan to retire. If you know the vicinity in which you plan to spend your retirement years it would be a good idea to check on current costs for nursing home, assisted living, community-based care, and home care services in that area. If there are a number of years left prior to your retiring an inflation guard rider on your policy should be a serious consideration.
Dementia
A disorder of the brain resulting in the deterioration of the intellectual faculities.
Disability Method
Method of paying benefits that requires you to only meet the benefit eligibility criteria to recieve your full daily or monthly benefit.
Dressing
Putting on and taking off all items of clothing, prosthetics (artifical limbs), braces, or fasteners.
Eating
Feeding oneself from a receptacle (dish, cup, bowl, etc) by getting food into the mouth, chewing and swallowing; or by self-administering a feeding tube or taking intravenously.
Elimination Period
The elimination period is the number of days you are financially responsible for before any insurance payments begin. Basically a deductible and should be accounted for in your budget as the out of pocket expense you would have once you have qualified for coverage. The longer the elimination period the less expensive the insurance, however, most financial planners recommend a 30 day elimination period for the majority of their clients. Elimination periods vary from company to company and can be anywhere from 0 to 365 days.
Enhanced Guaranteed Purchase Option (GPO)
Available typically every three years (may vary with companies and/or may not be available) if you do not choose the simple or compound inflation option. GPO provides an offer to increase your Daily or Monthly Benefit and your Policy Limit by either 5% , 10%, or 15% of the original amount without evidence of insurability. You may also have a one-time option to change your inflation protection to 5% compound at age 65 without any evidence of insurability with some companies.
Enhanced Return of Premium
This feature enhances the built-in Return of Premium benefit available with some companies, enabling your beneficiary to receive a benefit equal to your total premiums paid, less any long-term care benefits paid, regardless of your age at death.
Expense Incurred Method
Method of paying benefits where the insurance company first decides that you are eligible for benefits and that your claim is for eligible services. Once you are approved for an incurred eligible expense, benefits are paid either to you or your provider. The coverage pays for the lesser of the expense you incrred or the dollar limit of your policy. Most policies sold today pay benefits using the expense-incurred method.
Extended Term Benefits
Full benefits for a reduced time period, applicable for use during a certain period of time. If not used in a set number of years after the lapse, then you lose it. Once the period has expired, the contratct terminates.
Guaranteed Renewable
The policy cannot be cancelled by an insurance company and must be renewed when it expires, unless benefts have been exhausted. The company cannot change the coverage or refuse to renew the coverage for other than nopayment of premiums (including health conditions and/or marital or employment status). In a guaranteed renewable policy, the insurance company may increase premiums, but only on an entire class of policies, not just on your policy.
Hands-On Assistance
Physical assistance (minimal, moderate or maximal) without which the individual would not be able to perform an activity of daily living.
Health Insurance Portability and Accountability Act (HIPPA)
Federal health insurance legislation passed in 1996 that allows, under specified conditions, lon-term care insurance policies to be qualified for certain tax benefits.
Home for the Aged
A facility that cares for the elderly that often is not covered under a long-term care insurance policy.
Home Health Care
Care received in your home by a licensed or certified home care agency, which can include bathing, dressing, toileting, continence, eating, transferring (i.e. from bed to a chair). Some policies may also cover homemaker services which can provide assistance with cooking, cleaning, shopping, laundry, etc.
Homemaker Services
These services would include shopping, bill paying, cooking, housecleaning, laundry, and other household services that you are unable to do.
Hospice Care
Continuous care provided at home or in a facility with a homelike setting for a terminally ill person. A terminally ill person has a life expectancy of six months or less.
Indemnity Method
Method of paying benefits where the benefit is a set dollar amount and is not based on the specific service received or on the expenses incurred. The insurance company only needs to decide if you are eligible for benefits. Once the company determines you are eligible and you are receiving eligible long-term care services, the insurance company will pay that set amount directly to you up to the limit of the policy.
Inflation Rider
If you are purchasing a long term care policy and you are younger than age 75, an inflation rider on your policy is important. Most long term care policies offer both a 5% simple or a 5% compound inflation protection rider. If you purchase your policy between ages 55 and 74 the 5% simple will offer some protection, however if the compound inflation rider is within your budget, it remains the wiser choice, and is a definite must for those who purchase coverage under age 55.
Lapse
Termination of a policy when a premium is not paid.
Limited Payment Option
A premium payment option in which the person pays premiums for a set time period. After the last premium payment, neither the company nor the person can cancel the policy. These plans are more expensive than continuous payment policies; however, their guaranteed fixed payment and no-cancel features make them attractive to some persons.
Medicaid
A joint federal/state program that pays for health care services for those with low incomes or very high medical bills relative to income and assets.
Medicare
The federal program that provides hospital and medical insurance to people aged 65 and older and to certain ill or disabled persons. Benefits for nursing home and home health care services are limited.
Medicare Supplement Insurance
A private insurance policy that covers many of the gaps in Medicare coverage (also called Medigap insurance coverage).
National Association of Insurance Commissioners (NAIC)
A membership organization of state insurance commissioners. One of its goals is to promote uniformity of state regulation and legislation related to insurance.
Noncancelable Policies
Insurance contracts that cannot be cancelled by the insurance company and the rates can not be changed by the insurance company.
Nonforfeiture
If this benefit is available and you stop paying your premium after the third year, with some companies your past premiums may still be available to pay for services.
Nursing Home Care
Care received in a facility licensed by the state that offers skilled nursing and personal care on a 24 hour basis, room and board, medication, therapies and rehabilitation services.
Paid-up Policy
A provision for when you prematurely stop paying your premiums that your insurance policy is considered to be paid-in-full. You do not pay any additional premiums, however, the benefits you receive under the policy will be determined based upon the amount of premiums you have previously paid, and not on the level of benefits that you originally purchased.
Partnership Policy
A type of policy that allows you to protect (keep) some of your assets if you apply for Medicaid after using your policy's benefits. Only a few states have these policies.
Payment Options
In addition to the traditional options, when available, a 10-pay or Paid-Up (available up to age 65) option may give you the opportunity to pay for your policy during your income-earning years, so it can be competely paid for by the time you retire.
Pool Of Money
A pool of money policy is superior to the stated period policy. A pool of money policy will let you stretch the benefits years if you do not take out the maximum daily amount.
Personal Care (Custodial Care)
Personal care that can be provided by an individual who does not have professional training to assist individuals with needs such as bathing, dressing, cooking and eating.
Pre-existing Condition
An illness or disability for which you were treated and or advised on within a time period prior to applying for a life or health insurance policy.
Reduced Paid-up Benefits
A nonforfeiture option that "reduces your daily or monthly benefit" while retaining the full benefit period on your policy until death. An example would be: You purchased a 3 year policy with a $150 daily benefit and after a sepcified period let the policy lapse. Your daily benefit would be reduced (the exact amount of the reduction depends upon the total premiums you have paid on the policy), however you benefit period remains at 3 years. You can use the reduced paid-up beneftis at any time after your lapse up until your death.
Restoration of Benefits
Your full policy limit can be restored once if you have been receiving benefits and then recover, and need no care or treatment for 180 days...may or may not be an available benefit depending upon the company you choose.
Rescind
When the providing insurance company cancels (voids) a policy.
Respite Care
A period of time offered under some policies that allows a few hours to several days of relief care for an insured individual to allow family caregivers a break.
Rest Home
A general term for a facility that cares for elderly people. Often this type of facility is not covered under a long-term care policy.
Rider
An addition to an insurance policy that changes the provisions of the policy.
Shared Care
This feature (when available) allows you to use your partner's benefits when yours are exhausted. If one of you dies, the surviving partner's benefits will increase by the deceased partner's remaining benefit dollars. The surviving partner's premium will be reduced by the cost of the Shared Care benefit.
Shortened Benefit Period
A nonforfeiture option that reduces the "benefit period" however retains the full daily maximums applicable until death. The period of time for which benefits are paid will be shorter. An example: you purchase a policy with a 3 year benefit period with a $150 daily benefit and after a period of time let the policy lapse. The benefit period is reduced to less than three years which is determined by how much premium you have paid into the policy, however the daily benefit remains the same. You may use the shortened benefits at any time after policy lapse up until your death..
Simple 5%/5% Inflation
Each year, both your Daily or Monthly Benefit and your Policy Limit will increase by 5% on a simple interest basis.
Skilled Care
Daily nursing and/or rehabilitative care that can only be performed by or under the supervison of skilled medical personnel (most commonly in a nursing home). Care is usually needed 24 hours a day, must be ordered by a physician and must follow a prescribed plan of care.
Spend Down
A Medicaid rule where an individual must use up most of his or her assets and income to meet Medicaid eligiblity requirements.
Stand-by Assistance
Is when a caregiver stays close in order to watch over an individual in case physical assistance if necessary.
State Health Insurance Program
A federally funded program training volunteers to provide counseling regarding the insurance needs of senior citizens. A list of State Health Insurance Programs may be found in the NAIC publication "A Shopper's Guide To Long-Term Care Insurance".
Substantial Assistance
A term used in long term care policies that means hands-on or stand-by help is required to perform activities of daily living.
Substantial Supervision
A term used in long term care policies that means that the prescence of a person is needed to direct or watch over an individual who has an congnitive impairment.
Tax-Qualified Long-Term Care Insurance Policy
A policy that conforms to certain standards in federal law and offers certain federal tax advantages.
Third Party Notification
When a policy holder names an individual (family member, friend, attorney, etc.) who the insurance company will notify if your coverage is about to lapse due to lack of premium payment.
Toileting
Getting to and from the toilet, getting on and off the toilet and performing associated personal hygiene.
Transferring
Moving into and out of a wheelchair, chair or bed.
Underwriting
The process of examining, accepting, or rejecting insurance risks, and classifying those selected, to charge the proper premium for each.
Waiver of Home Care Elimination Period
If you receive home health care, hospice care in your home, or adult day care, your Elimination Period will be waived.
Waiver of Premium
This is a provision in a long term care policy that relieves the insured of premium payment while receiving benefits.
