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Long Term Care Glossary: Making Sure You Are On the Same Page As Your Insurance Agent

 

Nothing can be more confusing than not knowing the terminology associated with buying any product. How do you know what to look for? How do you know what to ask? Here is a glossary of long term care terms to get you started…

ADL’s (Activities of Daily Living) – The basic functions one must be able to perform in order to be considered able to live independently. They include: bathing, dressing, transferring, toileting, continence and eating. To receive benefits under a long term care policy, you must not be able to do 2-3 of these ADLs yourself.

Adult Day Care – Day care centers are non-residential settings for those who can’t remain safely at home alone due to physical or mental impairment. They can provide social, developmental, nutritional and therapeutic activities.

Assisted Living Facility – Facilities that provide independence. They usually provide a setting where everyone can gather for meals, housekeeping, and transportation.

Bed Reservation – The length of time a policy will pay to reserve a nursing home resident’s bed if they are hospitalized.

Benefit Period – The period of time long term care benefits are paid after satisfying a waiting period. Typical benefit periods are 2, 3 or 5 years and lifetime.

Benefit Trigger – Criteria that determine eligibility for benefits. These typically are a loss of 2 or 3 ADLs or cognitive impairment such as Alzheimer’s.

Cognitive Impairment – Problems with attention, memory, or other loss of intellectual capacity that requires supervision in order to protect or help the impaired person. Cognitive impairment, by itself, is generally the only Benefit Trigger necessary.

Custodial Nursing Care – Assistance with personal needs such as bathing, dressing, and eating; generally provided by persons without medical training.

Elimination Period – The time frame starting when the individual meets the criteria for benefits (Benefit Trigger) and the time benefits begin to be paid. Typical elimination periods are 60, 90 and 180 days.

Guaranteed Renewable – The provision that states that the insurance company cannot terminate the policy or change it as long as the premiums are paid on a timely basis.

Home Health Care – A wide range of services provided at home or another residential setting. These may include: part-time skilled nursing care, speech therapy, physical or occupational therapy, help from home health aides with taking medication, meal preparation and light housework.

Hospice Care – A program of care provided to terminally ill patients and their families. It emphasizes emotional needs and coping with pain and death rather than a cure.

Indemnity Benefit – A benefit that pays a defined amount regardless of the charges incurred. The lid is on the total benefit as opposed to defining a maximum dollar benefit for each procedure.

Inflation Protection – An add-on policy provision that provides for benefits increasing over time. A typical percentage is 5%. You generally have the choice of simple or compounding interest. Highly recommended if you are on the young side.

Respite Care – Temporary relief for family members or friends who are caring for a person at home.

Restoration of Benefits – A feature offered by some insurance companies that restores the portion of lifetime benefits used if the person recovers and goes without receiving benefits for a certain time ( 6 months would be typical).

Skilled Nursing Care – Twenty-four hour nursing or rehabilitation care that requires the services of skilled medical personnel, generally in a nursing home.

Waiver of Premium – A provision that waives the premium while benefits are being received.

 

 

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