Long Term Care Insurance Glossary

We have posted this glossary to help our customers better understand commonly used long-term care insurance terms. The glossary covers most of the main topics you should understand when making an investment in Long Term Care Insurance, but does not cover all aspects. This is why we recommend you contact us directly here.

Accelerated Death Benefit - A life insurance policy feature that lets you apply for some of the policy's death benefit prior to death.

Activities of Daily Living (ADLs) - Everyday functions and activities individuals usually perform without assistance. Some examples include dressing, bathing, eating, using the toilet, and walking. Many policies use the inability to perform ADLs as determining factor for benefit payment.

Alzheimer's Disease - A progressive, degenerative disease that causes severe mental deterioration.

Assisted Living Facility - A residential living arrangement that provides personal care and health services for people who require ADL assistance.

Benefit Triggers - Term used by insurance companies to describe when to pay benefits.

Care Management Services - A service in which a professional, typically a nurse or social worker, may arrange, monitor, or coordinate long-term care services.

Chronic Illness - An illness with one or more of the following characteristics: residual disability, rehabilitation training requirements, or supervision requirements, observation, or care.

Cognitive Impairment - Deficiencies in any of the following: an individual's short or long term memory, orientation as to person, place or time, deductive or abstract reasoning, or judgement as it relates to safety.

Community Based Services - Services created to help older people stay independent in their own homes.

Custodial Care (Personal Care) - Care which helps individuals meet basic personal needs such as bathing, dressing, and eating.

Daily Benefit - The amount of insurance benefit in dollars a person chooses to receive for long-term care expenses.

Dementia - Deterioration of intellectual faculties due to a disorder of the brain.

Elimination Period - A type of deductible; the length of time the individual must pay for covered services before the insurance company will began to make payments.

Guaranteed Renewable - When a policy cannot be cancelled and must be renewed when it expires unless all benefits have been exhausted. The insurance company cannot change the coverage or refuse to renew the coverage for anything other than nonpayment of premiums.

Health Insurance Portability and Accountability Act (HIPAA) - Federal health insurance legislation passed in 1996 that allows, under specified conditions, long-term insurance policies to be qualified for certain tax benefits.

Home Health Care - Services for occupational, physical, respiratory, speech therapy, or nursing care. Also included are medical, social worker, home health aide, and homemaker services.

Lapse - Termination of a policy when a renewal premium is not paid.

Long Term Care Insurance Coverage - Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital. Benefits may be provided for institutional care, such as confinement in a nursing home and community based services, such as adult day care and home health care.

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 providing hospital and medical insurance to people aged 65 or older and to certain ill or disabled persons. Benefits for nursing home and home health services are limited.

Medicare Supplemental Insurance - A private insurance policy that covers many of the gaps in Medicare coverage.

National Association of Insurance Commissioners (NAIC) - Membership organization of insurance commissioners. One of its main goals is to promote uniformity of state regulation and legislation related to insurance.

Noncancellable Policies - An insurance contract that cannot be cancelled or change rates.

Pre-Existing Condition - Illnesses or disability for which you were treated or advised within a specific time period before applying for a life or health insurance policy.

Respite Care - Offers a few hours to several days of help to relieve family caregivers.

Rider - Addition to an insurance policy that changes the provisions of the policy.

Spend Down - A requirement that insists an individual use up most of his or her income and assets to meet Medicaid eligibility requirements.

State Health Insurance Assistance Program - A federally funded program to train volunteers to provide counseling on the insurance needs of senior citizens.

Substantial Assistance - Hands-on help required to do ADLs (Activities of Daily Living).

Substantial Supervision - The presence of a person directing and watching over another who has a cognitive impairment.

Tax Qualified Long Term Care Policy - A policy that conforms to certain standards in federal law and offers certain federal tax advantages.

Third Party Notice - A benefit that lets you name someone who the insurance company would notify if your coverage is about to end due to lack of premium payment. This can be a relative, friend, or professional such as a lawyer or accountant..

Underwriting - The process of examining, accepting, or rejecting insurance risks, and classifying those selected, in order to charge the proper premium for each.

Waiver of Premium - A provision in an insurance policy that relieves the insured of paying the premium while receiving the benefits.

We at Long Term Care Insurance Central sincerely hope that this information has been of help. However, if you have any questions or concerns, we recommend you contact us here.

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