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LONG TERM CARE GLOSSARY
LONG TERM CARE INSURANCE IS A POLICY FORM
DESIGNED TO HELP PAY FOR THE
COSTS ASSOCIATED
WITH CARE RECEIVED IN A NURSING
HOME, AN
ASSISTED LIVING FACILITY, AT
HOME, AND SOMETIMES
IN SOME ALTERNATIVE SETTING.
THE PRIMARY
REASONS THAT A CLIENT WOULD PURCHASE
A LONG
TERM CARE POLICY ARE TO RECEIVE
CARE IN THE
SETTING THAT IS MOST BENEFICIAL
AND DESIRABLE
AND TO PRECLUDE HAVING TO USE
EXISTING ASSETS
TO PAY FOR LONG TERM CARE RELATED
COSTS.
MOST CARRIERS OFFER A CHOICE OF TAX QUALIFIED
(TQ) OR NON-TAX QUALIFIED (NTQ) POLICY FORMS.
SOME CARRIERS OFFER EITHER ONE OR THE OTHER
POLICY FORM. GREAT CARE MUST BE TAKEN IN
DECIDING WHICH POLICY FORM TO PURCHASE. TQ
POLICIES OFFER SIGNIFICANT TAX ADVANTAGES
TO INDIVIDUALS AND BUSINESSES REGARDING ISSUES
SUCH AS DEDUCTIBILITY OF PREMIUMS, NOT ATTRIBUTING
CORPORATE PAID PREMIUMS AS BONUSES TO EMPLOYEES,
AND NOT TAXING BENEFITS WHEN RECEIVED. NTQ
POLICIES USUALLY OFFER AN ADDITIONAL "BENEFIT
TRIGGER", MEDICAL NECESSITY, ALONG WITH
THE OTHER TWO, COGNITIVE IMPAIRMENT, AND
INABILITY TO PERFORM A CERTAIN NUMBER OF
ACTIVITIES OF DAILY LIVING (ADL'S), PERHAPS
MAKING IT EASIER TO QUALIFY FOR BENEFITS.
IN ADDITION TO THE REGULAR POLICY
FORMS ISSUED,
SOME CARRIERS ALSO OFFER PARTNERSHIP
POLICIES
IN NEW YORK, CALIFORNIA, CONNECTICUT,
AND
INDIANA. THESE PARTNERSHIP FORMS
DIFFER BY
STATE AND HAVE CERTAIN MINIMUM
REQUIRED BENEFITS
ASSOCIATED WITH THEM. IN NEW
YORK, ONCE A
CLAIMANT HAS EXHAUSTED THE 3
YEAR BENEFIT
USUALLY ASSOCIATED WITH A PARTNERSHIP
PLAN,
HE OR SHE CAN THEN STAY IN A
MEDICAID CERTIFIED
BED IN A NURSING HOME WITHOUT
THE STATE HAVING
ACCESS TO RECOVERY FROM THE CLAIMANT'S
ASSETS.
THE STATE CAN HOWEVER GO AFTER
THE CLAIMANTS
INCOME. THERE ARE MANY THINGS
TO CONSIDER
WHEN DECIDING UPON WHICH POLICY
FORM IS IN
A CLIENTS BEST INTEREST.
LISTED BELOW ARE A NUMBER OF COST RELATED
OPTIONS AND BUILT IN FEATURES THAT ONE MUST
CONSIDER WHEN CONSIDERING PURCHASING THIS
TYPE OF COVERAGE:
ELIMINATION PERIOD- THIS IS THE PERIOD OF TIME THAT MUST ELAPSE
ONCE A CLAIM HAS BEEN "TRIGGERED"
BEFORE A PAYMENT IS MADE TO THE
INSURED.
THE USUAL CHOICES ARE EXPRESSED
IN "DAYS"
FOR EXAMPLE 0, 30, 60, 90, 180,
& 365.
DAILY BENEFIT- THIS IS THE AMOUNT PAID FOR EACH DAY THAT
THE INSURED IS ON CLAIM. THE DAILY COSTS
OF CARE CAN BE RESEARCHED UP TO THE MINUTE
BUT THE AVERAGE DAILY BENEFIT IN NEW YORK
STATE IS SOMEWHERE BETWEEN $200 - $250. MOST
CARRIERS WILL ISSUE BETWEEN $300 - $400 DAILY
BENEFIT DEPENDING ON THE STATE AND REGION
WITHIN THE STATE THE CLIENT RESIDES.
BENEFIT PERIOD- THIS IS THE LENGTH OF TIME THAT AN INSURER
WILL CONTINUE TO PAY A CLAIM.
THIS IS USUALLY
EXPRESSED IN TERMS OF YEARS,
FOR EXAMPLE
1, 2, 3, 4, 5, AND LIFETIME.
INFLATION / INCREASE OPTION- THIS IS AN OPTION TO INCREASE THE LEVEL
OF DAILY BENEFITS ORIGINALLY PURCHASED. IT
IS USUALLY EXPRESSED AS SIMPLE, COMPOUND,
AND COST OF LIVING. WHAT THAT MEANS IS THAT
THE INCREASES INCREASE BASED UPON THE ORIGINAL
DAILY BENEFIT PURCHASED, THE PRIOR YEAR'S
DAILY BENEFIT, OR ARE TIED TO A CONSUMER
PRICE INDEX.
SURVIVORSHIP BENEFIT- THIS OPTION WOULD PAY THE PREMIUMS FOR A
SURVING SPOUSE AT DEATH OF SPOUSE
SUBJECT
TO PREMIUMS HAVING BEEN PAID
FOR A SPECIFIED
PERIOD OF TIME.
DUAL WAIVER OF PREMIUM- THIS OPTION WOULD WAIVE THE PREMIUMS ON
BOTH SPOUSES POLICIES, IF ONE
OF THE SPOUSES
HAS HAD THEIR PREMIUMS WAIVED
UNDER THE BUILT
IN WAIVER OF PREMIUM BENEFIT.
RESTORATION OF BENEFITS- THIS OPTION RESTORES BENEFITS ALREADY USED
IF THE INSURED HAS RECOVERED FOR A SPECIFIED
PERIOD OF TIME.
SHARED POOL OF MONEY- THIS BENEFIT ISAVAILABLE WHEN TWO SPOUSES
EACH PURCHASE A BENEFIT PERIOD
LESS THAN
LIFETIME. AN ADDITIONAL POOL
OF MONEY IS
PURCHASED ALLOWING EITHER OR
BOTH SPOUSES
TO ACCESS THE ADDITIONAL POOL
OF MONEY TO
PAY CLAIMS.
INDEMNITY OPTION- THIS RIDER TAKES A REIMBURSEMENT OF EXPENSES
INCURRED POLICY FORM AND CHANGES IT SO THAT
THE BENEFIT IS PAID REGARDLESS OF EXPENSES
ACTUALLY INCURRED.
DISCOUNTS- THERE ARE USUALLY DISCOUNTS AVAILABLE FOR
PREFERRED HEALTH RISKS, NON TOBACCO
USERS,
SPOUSES, MEMBERS OF AFFINITY
GROUPS- SUCH
AS A CHAMBER OF COMMERCE, &
MEMBERS OF
EMPLOYER SPONSORED GROUPS. THE
DISCOUNTS
VARY BASED IN PART ON THE SIZE
AND LOCATION
OF THE GROUP.
IN ADDITION TO THE COST RELATED
OPTIONS LISTED
ABOVE, THERE ARE A NUMBER OF
POLICY FEATURES
THAT ARE SOMETIMES INCLUDED IN
A LONG TERM
CARE POLICY. ONE MUST BE CAREFUL
AS NOT EVERY
CARRIER OFFERS EACH OF THESE
FEATURES, AND
SOME CARRIERS OFFER MORE THAN
ONE POLICY
FORM, EACH WITH IT'S OWN FEATURES.
THESE
FEATURES INCLUDE:
HOSPICE CARE- THIS BENEFIT WILL PAY FOR SOME OR ALL OF
THE COSTS ASSOCIATED WITH A STAY
IN A HOSPICE.
RESPITE CARE- THIS BENEFIT PAYS TO TEMPORARILY RELIEVE
YOUR INFORMAL CARE GIVER FOR
AN EMERGENCY
OR A VACATION.
BED RESERVATION BENEFIT- THIS BENEFIT RESERVES YOUR ACCOMODATIONS
WHILE YOU ARE TEMPORARILY ABSENT
FROM A NURSING
HOME OR ALTERNATE CARE FACILITY.
INFORMAL CARE GIVER- DEPENDING UPON THE CARRIER, THIS EITHER
PAYS TO TRAIN AN INFORMAL CAREGIVER-
USUALLY
A FAMILY MEMBER, NEIGHBOR, OR
CLOSE FRIEND,
OR IT PAYS THEM FOR THE SERVICES
THEY PROVIDE.
INDEPENDENT CARE GIVER CERTIFICATION- THIS TYPE OF BENEFIT USUALLY PAYS TO TRAIN
AN INDEPENDENT PERSON TO THE
POINT OF THEIR
RECEIVING CERTIFICATION AND LICENSING.
SOME
CARRIERS WILL EXCLUDE PAYING
FOR THIS TYPE
OF BENEFIT FOR FAMILY MEMBERS
WHO ARE LIVING
WITH THE INSURED / CLAIMANT.
WAIVER OF PREMIUM- THIS FEATURE WAIVES THE CLAIMANTS OBLIGATION
TO PAY PREMIUMS UPON EITHER RECEIVING
CARE
FOR A SPECIFIED NUMBER OF DAYS
OR SATISFACTION
OF THE ELIMINATION PERIOD, OR
A CERTAIN NUMBER
OF CALENDAR DAYS FROM DAY OF
DIAGNOSIS.
INTERNATIONAL COVERAGE- THIS BENEFIT PROVIDES FOR BENEFITS TO BE
PAID WHILE TRAVELING OR LIVING
OUTSIDE THE
UNITED STATES.
MENTAL & NERVOUS CONDITION COVERAGE- THIS BENEFIT PROVIDES FOR COVERAGE WHEN
THE CLAIM ARISES FROM MENTAL
OR NERVOUS DISORDERS
THAT ARE DETERMINED BY CLINICAL
DIAGNOSIS
OR TESTS, INCLUDING ALZHEIMERS'S
OR SENILE
DEMENTIA.
MISCELLANEOUS- SOME POLICIES CONTAIN LANGUAGE THAT REFERENCE
FUTURE TYPES OF CARE, SOME NOT EVEN DEVELOPED
YET, AND LEAVE THE DOOR OPEN TO PAY FOR THESE
BENEFITS.
TO ORDER PROPOSAL
GLOSSARY INDEX
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