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- Adult Day Care Facility—State-licensed facility with a full-time director and registered nurse present at least 4 hours a day but is not an overnight facility. Day care facilities maintain written records of services, are open a minimum number of hours per day at least 5 days per week, and have established procedures for handling medical emergencies.
- Assisted Living Facility—A residential living arrangement that provides individualized personal care and health services for people who require assistance with activities of daily living. Facility settings can range from small homes to large apartment-style complexes. Levels of care and services also vary and can be charged separately. Assisted living facilities offer a way to keep a relatively independent lifestyle for people who don’t need the level of care provided by nursing homes.
- Benefit Period—Determined by the total benefit pool should the monthly/daily benefit maximum be used up. Monthly/daily benefits that are not fully used can carry over—thereby extending the actual benefit period.
- Benefit Triggers—Conditions that must be met before the policy pays benefits. Most common triggers include inability to perform 2 or more ADLs and/or cognitive impairment.
- Case Manager—Usually a representative from the insurance company who evaluates the patient’s need for care and determines the best type of care for the patient’s situation. Case managers often help the insurer by controlling costs and help the insured by identifying resources available in the community.
- Cognitive Impairment—A deficiency in a person’s short- or long-term memory; orientation concerning person, place, and time; deductive or abstract reasoning; or judgment as it relates to safety awareness.
- Contingent Nonforfeiture—Provides options to the insured in the event of a rate increase. (1) Pay the higher premium for the same coverage, (2) pay the same premium for decrease benefit levels, and (3) convert to a paid-up policy with a shortened benefit period. [As defined by the National Association of Insurance Commissioners (NAIC)]
- Elimination Period—A type of deductible. The length of time the individual must pay out of pocket for covered services before the policy begins paying benefits. LTC policies can use “calendar-day” or “service-day” elimination periods (EPs). Service-day EPs will only count days when long term care services are paid for by the insured. Calendar-day EPs count days services are needed.
- Guaranteed Renewable—Policies with this language cannot be canceled by an insurance company except for non-payment. The insurance company may increase premiums but only on an entire class of policies.
- Home Health Care—Formal paid health care services provided in the home by a nurse or other licensed professional (e.g., home health aide, nutritionist, and physical therapist).
- Homemaker Services—Assistance with chores or activities that are necessary for an individual to be able to remain in their residence.
- Hospice Care—Care for a terminally ill person (life expectancy less than 6 months).
- Inflation Protection—Cost-of-living increases, which are usually compounded, or step-rated.
- Intermediate Nursing Care—Care for stable conditions requiring daily but not 24-hour supervision and is less intensive than skilled care and supervised by registered nurses.
- Partnership Policy—If a LTC policy is partnership qualified, it allows the insured to protect some of their assets. After the insured exhausts their LTC policy benefits, they can apply for Medicaid. The benefit pool of the policy, combined with the Medicaid limit, is how much the insured can own and still be eligible. As an example, if the benefit pool is $150k and the Medicaid limit is $15k, a policy holder can be eligible for Medicaid benefits even if they own $165K of assets. States vary in specific requirements for what qualifies as a partnership policy.
- Return of Premium—A cost rider that returns some or all the insured’s premiums at cancellation or death. Each carrier has several return-of-premium rider options. See the carrier’s brochure for more information on how each rider works.
- Shared Care—Applies to couples only and allows an insured to use benefits from their partners LTC insurance policy, after exhausting all of their own benefits.
- Shortened Benefit Period—A benefit provided by a nonforfeiture rider or contingent nonforfeiture benefit, which shortens the benefit period of the policy without taking from daily/monthly maximums. For instance, if an insured pays for a 3-year benefit period and becomes subject to substantial rate increases, their benefit period may be reduced to just one year of coverage.
- Skilled Nursing Facility (SNF)—A facility licensed and certified by the state that provides both skilled nursing and personal care services. The care must be available 24 hours a day.
- Standby Assistance—The presence of another person within arm’s reach, which is necessary to prevent injury while the individual is performing an ADL.
- Substantial Assistance—Most tax-qualified LTC policies require “substantial assistance” with ADLs as a benefit trigger. Substantial assistance can be defined as either “hands-on assistance” or “standby assistance.”
- Substantial Supervision—Continual supervision that is needed to protect the individual from threats to their health or safety. Most tax-qualified LTC policies require “substantial supervision” over an insured with a cognitive impairment as a benefit trigger.
- Survivor Benefits—On a joint policy, if a partner passes, the benefits from their policy can be used to “pay up” the surviving partner’s policy. The surviving spouse will not have to pay further premiums.
- Tax-Qualified Policies—If an LTC policy meets the standards set by federal law, it offers certain federal tax advantages.
- Third-Party Notice—A benefit which lets the insured name someone whom the insurance company can contact if the premium is not paid.
- Waiver of Premium—A provision that relieves the insured of paying the premiums while receiving benefits.