Activities of daily living (ADL
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These are common activities that people perform every day, specifically:
- eating
- toileting
- transferring (moving to/from a bed or
chair)
- bathing
- dressing, and/or
- bowel and bladder control
(continence)
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Bed
reservation
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If you are in a nursing facility and leave to visit family or go into a hospital, nursing homes will not usually reserve your bed for you. Some policies have a bed reservation benefit which will hold your bed for you in case of your
absence. |
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Benefit
period
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If you select a three-, four-, five- or six-year policy, that length and the maximum daily, weekly or monthly benefit you chose determines your pool of money. The insurance will pay benefits until your pool of money is exhausted: a process that may take longer than the length of the policy.
Example: If you chose a $100 daily benefit and a three-year policy, you would have $109,500 ($100 times 365 days times 3 years) in your pool of money for covered services. Your policy will last more than three years unless you receive covered services that cost at least $100 a day, day in and day out, for three years in a row.
Benefits the insurance pays reduces your pool of money, dollar for dollar. When the pool is gone, your insurance ends. A lifetime benefit has a limitless pool of money, but is also the most expensive coverage.
If you choose an automatic inflation protection option, your pool of money will increase each year. |
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Cognitive
impairment
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An impairment
in
short or long-term memory;
orientation as to person, place and time; or
deductive or abstract reasoning.
Such impairment or loss places you in jeopardy of harming yourself or others and therefore you need substantial supervision by another person. The most common form of cognitive impairment is advanced Alzheimer's disease. |
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Daily, weekly or monthly
benefit
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The amount that a policy will pay, per day, week or month for covered long term care. |
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Elimination
period
(Also referred to as waiting period or deductible.)
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This is the number of days of covered care that you (or other insurance coverage you may have) must pay for before the long term care insurance begins to pay. Some policies count covered days of care differently or may use calendar days elapsed after being disabled.
Most carrier elimination periods do not count calendar days, but the days you actually receive care. So a 90-day waiting period will last longer than 90 calendar days unless you receive covered care every day.
The elimination period affects the insurance premiums you pay. The shorter the waiting period, the higher the premiums
Elimination periods of 30, 50, 60, 90 and 100 days are the most common. |
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Guaranteed
renewable
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As long as you pay your premiums, the insurance company cannot change or cancel your coverage for any reason. |
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HIPAA
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The Health Insurance Portability and Accountability Act of 1996 became law on Jan.1, 1997. The Act specifies requirements that a
long term care insurance policy must meet in order that premiums paid may be deducted as medical expenses, and benefits paid not be considered taxable income. |
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Indemnity
benefit
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An indemnity benefit is a fixed amount paid when care is received, regardless of the cost of care. For example, if your long term care costs $80 a day, but you have a $100 a day benefit, you would receive the additional $20 regardless of the fact that incurred expenses were only $80 per day. |
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Inflation
protection
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Most policies provide for an annual increase in the maximum daily and lifetime benefits to combat rising inflation. This option is available at an extra cost. There are usually two options to choose from:
- Simple
inflation protection
(not available in all
states): Your daily, weekly or monthly benefit (and pool of money) increase by a flat amount each year. Most plans increase by five percent of the original maximum daily, weekly or monthly benefit.
- Compound inflation protection: Your daily, weekly or monthly benefit (and pool of money) would automatically increase by a given percentage every year. Current plans are five percent. Your premiums would be designed to remain level for life, even as your benefit increases. The compound inflation option is preferred, especially for purchasers who are not likely to need coverage for many years.
Limited payment plans: There may be some options to allow you to pay higher premiums for a limited number of years, so that you would have a paid-up policy at some point in time.
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Long term care (LTC)
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Long term care is a range of services which address the health, social and personal care needs of individuals who need assistance or supervision, due to a severe cognitive impairment, with activities of daily living, such as eating, bathing, continence, dressing, using the restroom, and transferring. |
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Medicaid
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The joint federal and state government program to pay medical costs for the poor. Medicaid will pay nursing home and some home care costs if you are disabled, provided that your financial assets and/or monthly income are below certain allowed levels. Contact your state Medicaid program for state-specific details. |
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Medicare
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The federal government program to provide health insurance for people over 65 years of age, certain disabled individuals and qualified kidney dialysis patients. Medicare pays very little for LTC. |
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Premiums
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Your premiums are based on your age when you buy the coverage (generally, the younger you are when you buy, the lower the premiums). Your premiums also are based on the maximum benefit level, length of policy, elimination period and type of inflation protection you choose and other factors. |
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Premium
discounts
|
If both you and your spouse apply, some companies will give a
10% to 25% discount. Preferred health discounts, ranging from five percent to 20 percent, also may be available. By purchasing through FTJ’s Evaluation Service, you also may have access to an association discount through your membership in your professional association. |
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Respite
care
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Respite care is provided to give relief to the person who normally would care for you. It is a replacement for care you would usually receive at home from a relative or friend.
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Severe cognitive
impairment
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The deterioration or loss of your mental capacity which requires continual supervision to protect yourself or others. |
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Spousal
discounts
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Most policies offer a discount if you and your spouse apply for and receive coverage at the same time. Some carriers have an option for a joint policy, where you and your spouse could have your own pool of money and also share a pool of money with each other. |
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Standby
assistance
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The presence of another person within arm’s reach of the individual that is necessary to prevent injury while the individual is performing an activity of daily living. |
