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Glossary of Long Term Care Insurance Terms

Activities of Daily Living (ADLs)
The basic activities and functions performed on a daily basis that are usually done without assistance. The six ADLs are:
  1. Eating
  2. Dressing
  3. Bathing
  4. Toileting
  5. Transferring
  6. Continence
Accumulation Period
The pre-determined amount of time that must pass before the benefits are to go into effect for the claimant.
Allocated Benefits
Benefits that have a stated maximum amount payable for specific services itemized in the contract.
Application
A signed statement of facts filled out by the person applying for the insurance policy, which is then used by the insurance company to decide whether or not to issue a policy. The application then becomes part of the policy.
Assessment
Determination of the person's level of physical ability or mental capability, and the type and extent of services available and needed
Assignment
The legal transfer of one person's insurance policy to another person
Assisted Living Facility
A facility which provides 24 hour around the clock care to resident patients in need of assistance with any number of the Activities of Daily Living (ADLs).
Beneficiary
The person designated or provided for by an insurance policy's terms to receive any benefits provided by the policy or plan upon the death of the insured.
Benefit Period
The amount of time an insurance company will make payments to the individual to pay for care, etc after the deductible has been satisfied.
Caregiver
The individual who cares for someone with a disability or illness. The primary caregiver is usually a spouse, child or other relative.
Care Coordinator
An individual employed by the insurance company to handle all matters, financial and otherwise, regarding the welfare of the claimant for cost effective purposes. This includes, but is not limited to, selecting physicians, specialists, care centers, hospitals, etc. as well as coordinating time periods of care.
Daily Benefit Period
The length of time which your daily benefits cover.
Daily Benefit Rate
The pre-determined amount of time that must pass before the benefits are to go into effect for the claimant.
Accumulation Period
The rate predetermined by your policy provider to cover your daily benefits.
Elimination Days
A period of time between the initial need for care and the beginning of the payments from the insurance company.
Elimination Period
The number of days that you have to pay benefits before your coverage begins to pay for benefits
Evidence of Insurability
Statements or proof or a person's physical condition affecting the acceptance for insurance.
Home Care Providers
A person who provides home health care or hospice services and who meets the following criteria:
  1. Under the Medicare Program, has an agreement to be a provider of home health care services
  2. Is licensed by their state as a home health care agency or hospice if licensing is required in the state in which they are practicing
  3. Is a licensed therapist, a registered nurse (R.N), a licensed practical nurse( L.P.N), or a licensed vocational nurse (L.V.N.) providing services under the guidelines of their license
Home Care Services
Household services done by someone else because you are unable to do them yourself. These include nursing services, personal hygiene, house chores, errands, and preparation of meals, laundry and small house maintenance.
Home Health Aid
Licensed individual that performs daily care for those in need of assistance in their homes. Generally these people provide help with basic daily activities such as bathing, eating, and dressing.
Homemaker Service
Generally in combination with a Home Health Aide, this person will cook, clean, run errands, etc.
Hospice Care Services
Out patient services provided by a licensed hospice provider to help ease the pain of terminally ill patients in their last stages of their terminal disease. They also provide support to the primary care giver and the family.
Indemnity
Compensation to the claimant for disability or illness suffered - security against loss.
Independent Agent
A business person that represents two or more insurance companies in sales and service and who is paid on a commission basis.
Independent Caregiver
A person who provides home health care services or hospice care who:
  1. Is licensed to provide the care they are giving and are working independently from a home health care agency. They must be licensed in the state they are working in.
  2. Is chosen by You and has been qualified under the Independent Caregiver Certification Benefit
  3. Is not a member of your immediate family living with you
Informal Caregiver
Usually a spouse or relative, an informal caregiver is an unpaid individual who takes on the responsibility of providing care for the individual in question.
Inflation Rate
The rate, which the cost of long-term care is expected to increase in the future. Generally this rate is 1-2% higher than the overall U.S inflation rate.
Insurance Policy
A legal contract issued by the insurance company to secure coverage for claimant.
Insurance Premium
The pre-specified amount an individual pays to guarantee coverage for a policy.
Insured
A person covered under an insurance policy, including any persons named as receiving protection under the policy.
Insurer
The insurance company that agrees to pay losses of benefits. Also, the insurer can be any company whose primary business is selling insurance to the public.
Long Term Care
Care given in the form of medical and support services to persons who have lost some or all of their capacity to function due to an illness or disability. These services are generally provided away from the primary health care facility and are of a long time frame.
Long Term Care Insurance
The insurance which pays for a succession of care giving services for the elderly or chronically ill. This care may be provided in a facility (nursing home, mental hospital, etc.) or in the individual's home with a nurse or aide.
Maximum Lifetime Benefit
The total amount Your carrier will pay you in Your lifetime for all benefit provided under your policy.
Medicaid
Public assistance funded through the state to individuals unable to pay for health care. Medicaid can be accessed only when all prior assets and funds are depleted.
Medicare
A Government program, administered by the Social Security Administration, which provides financial assistance to individuals over the age of 65 for hospital and medical expenses. Medicare does not cover long-term care expenses.
Medigap
Private health insurance that is used to pay costs not covered by Medicare, such as deductibles and co-insurance.
Payment of Claim
Timely payment, generally monthly after services have been given to patient and the filed claim is proven valid.
Policy
A written legal contract of insurance issued by the insurance company to the policyholder, which outlines the terms of the insurance.
Policy Holder
Individual that has a written and signed agreement with their insurance provider.
Policy Term
The length of time the insurance policy provides coverage.
Premium
The annual payment from the individual to the insurance policy to keep the policy active.
Premium Rates
Rates that determine amount of the premium. It is important to research the history of rate increases for each perspective carrier.
Quote
A proposed estimation of the needs of the assessed individual to determine an appropriate policy.
Rate
The pricing factor that the insurance company bases their insurance buyer's premium.
Rated Policy
Also known as an "Extra-Risk" policy, this policy is issued at a higher than stated premium rate due to extra risk in the policy holder, such as impaired health or a dangerous occupation.
Renewal
The continuance of the coverage of a policy that is beyond the original length of time set in the original policy based on the acceptance of the new policy's premium.
Respite Care
Care provided through a long-term care facility to temporarily relieve the informal caregiver's burden of responsibility.
Rider
Written contract agreement between insurer and insured which changes the policy or certificate.
Severe Cognitive Impairment
A loss or breakdown of the mental capability that is similar to Alzheimer's Disease and similar forms of dementia. It is measured by clinical evidence and standard tests that provide valid information regarding the patient's impairment which includes (1) memory both short-term and long-term, (2) orientation to people, places, or time, and (3) deductive or abstract reasoning.
Skilled Nursing Care
This is the highest level of care provided by a Registered Nurse (R.N) or a Licensed Practical Nurse (L.P.N) 24 hours a day. It is prescribed by a physician for the most severely impaired person who cannot perform their own personal needs.
Tax Qualified (TQ) Policies
Beginning January 1, 1997, long-term policies meeting certain requirements qualify for favorable tax treatment. Buyers of these plans may deduct the premiums if they itemize their deductions on their Federal Tax return. Premiums are treated as medical or health insurance expenses and must be equal to more then 7.5% of adjusted gross income. Also, benefits received from a Tax Qualified Plan (TQ Plan) are not taxable up to $175.00 a day.
Underwriting Process
Steps through which an insurance application is reviewed by a licensed insurance counselor to become approved for insurance.
Waiting Period
Period of time lost while waiting for Home Health Care.
Waiver
An agreement attached to the policy that exempts from coverage specific disabilities and injuries that normally would be covered under the policy.
Written Premiums
The total amount of premiums due in a year for all policies issued by an insurance company.