Glossary of LTC Terms

Our glossary was designed to give you quick answers to those LTC terms or concepts which may be unfamiliar.  It covers a wide range of clear, in-context definitions pertaining specifically to Long Term Care Insurance.

Activities of daily living (ADLs)

– every day functions and activities individuals usually do without help. ADL functions include bathing, continence, dressing, eating, toileting and transferring. Many policies use the inability to do a certain number of ADLs (such as 2 of 6) to decide when to pay benefits.

Adult day care

– a place that provides a program of activities and services to individuals in need of Long Term Care. It is a helpful option for individuals living at home whose family caregivers work during the day and who require someone to be with them throughout the day.

Acute care

– care provided by a doctor or other health care professional designed to treat or cure an illness, wound, or condition. Long Term Care is not acute care.

Alternate plan of care

– some Long Term Care insurance policies allow a care coordinator to authorize benefits for services that are not specifically covered under the policy. For example, an alternate plan of care could allow benefits for services to make your home wheelchair-accessible.

Alzheimer’s disease

– a progressive neurological disease that affects brain functions, including short-term memory loss, inability to reason, and the deterioration of language and the ability to care for oneself.

Assisted living facility (ALF)

– a licensed residential facility that provides room, board and 24-hour personal care to individuals with Long Term Care needs. It is an important care option for individuals who are not able to manage at home but do not need the level of skilled care provided in a nursing home.

Bed reservation

– if you are in a nursing home, assisted living facility, or hospice facility, and you leave that facility, some Long Term Care insurance policies will pay for charges you incur to hold a space until you can return to that facility.

Benefit

– payment an insurance company makes for a service covered under the plan.

Benefit period

– under many Long Term Care insurance policies, this is the length of time your insurance will last if you receive care every day at a cost equal to or more than your daily benefit amount. If your care costs less, your insurance will last longer than the benefit period. The benefit period is usually used together with your daily benefit amount to calculate your maximum lifetime benefit.

Benefit trigger

– a term used by insurance companies for the requirements you must meet in order to become eligible for benefits. Benefits are payable after you meet the benefit trigger and satisfy the required elimination period.

Care coordination services

– services provided under some Long Term Care insurance policies, such as information, advice and arranging of Long Term Care by a professional care coordinator.

Caregiver

– the person who helps you accomplish the basic everyday activities you can no longer manage without assistance, due to illness, injury or cognitive impairment.

Caregiver training

– some long term in-home care insurance policies will provide benefits for training provided to an informal caregiver or a caregiver whose services are not covered under the policy.

Chronic care

– care provided to help maintain daily function. There is no expectation that the care recipient will improve or recover. Long term health care is chronic care.

Cognitive impairment

– a deterioration or loss in intellectual capacity that results in impairment in some or all of the following: short and long term memory, orientation to people, place and time, deductive or abstract reasoning (including judgment), and ability to perform activities of daily living.

Community-based services

– services, such as Meals on Wheels and adult day care, designed to help people remain independent and in their own homes.

Continence

– an activity of daily living – the ability of the body to control urination or bowel movements or both.

Covered services

– the qualified Long Term Care services that are covered under a Long Term Care insurance policy.

Custodial care

– services aimed at maintaining your health and/or preventing deterioration in your functional status, provided on an extended basis. Long Term Care includes custodial care.

Elimination Period

– the time between becoming eligible for benefits and when your Long Term Care insurance actually begins paying those benefits. Sometimes known as a waiting period or a deductible, it helps keep premiums affordable. The longer the Elimination Period, the lower the premiums. The Elimination Period can be measured in calendar days or days of service. A days of service elimination period is the number of days you must be eligible for benefits and receiving covered services before your benefits begin.

Exclusions

– specific conditions or circumstances for which an insurance policy will not provide benefits.

Formal care

– care which is provided by a home health aide or homemaker arranged or supervised by a home care agency, or provided by a nurse or therapist.

Free-look period

– a protection included in many Long Term Care coverage policies, which allows you to cancel coverage within 30 days after you receive your policy and receive a complete refund of any premium you paid.

Future purchase option

– an inflation protection feature that allows you to periodically purchase additional coverage without proof of good health.

Guaranteed renewable

– a feature whereby an insurance company cannot cancel or fail to renew coverage because of a change in a person’s health or age. As long as premiums are paid and benefits have not been exhausted, coverage will continue. When a plan is guaranteed renewable, premiums may be changed on a class basis only.

Hands-on assistance

– when you require physical help by another person without whom you would not be able to perform the activities of daily living. Some insurance companies measure the inability to perform activities of daily living based on the need for hands-on assistance.

Health Insurance Portability and Accountability Act (HIPAA)

– federal health insurance legislation passed in 1996 that specifies conditions under which certain Long Term Care insurance policies qualify for tax advantages.

Home care

– services provided at home which may include nursing care; occupational, physical, respiratory or speech therapy; personal care; and homemaker services.

Home health aides

– individuals who provide care to older adults or people with disabilities at home. Training or certification may vary for home health aides, but typical services they provide include assistance with activities of daily living, managing medications, and some household tasks.

Homemaker services

– household chores performed for someone unable to do them on their own.

Hospice care

– services provided by a hospice for the care or management of a terminal illness.

Inflation protection

– a feature or option of Long Term Care insurance coverage that increases the value of benefits over time to keep pace with increasing costs of care.

Informal care

– care provided by an unlicensed caregiver whose services are not arranged and supervised by a home care agency.

Lapse

– termination of insurance coverage when premium is not paid.

Licensed health care practitioner

– a physician, any registered professional nurse, or a licensed social worker.

Lifetime benefits

– see unlimited benefit period

Long Term Care (LTC)

– personal care and other related services provided on an extended basis to people who need help with activities of daily living or who need supervision due to a severe cognitive impairment. It can be provided at home, in a nursing home, assisted living facility, or an adult day care center.

Long term home health care

– services provided at home which may include nursing care; occupational, physical, respiratory or speech therapy; personal care; and homemaker services.

Long Term Care insurance

– insurance that helps defray the costs of assistance with the activities of daily living or the costs of supervision due to a severe cognitive impairment and allows you to receive the type of care you need in the setting that’s right for you.

Maximum daily benefit

– this is the maximum amount a Long Term Care insurance policy will pay in any single day. The policyholder selects their maximum daily benefit amount when they apply for coverage. It should be based on the cost of care in the area in which you expect to live when you may need care.

Maximum lifetime benefit

– this is the maximum amount of benefits that your insurance coverage could pay. The maximum lifetime benefit can also be referred to as a “pool of money.” Your maximum lifetime benefit is generally calculated by multiplying your daily benefit amount times the number of days in the benefit period you selected.

Medicaid (Medi-Cal in California)

– the joint federal/state program that pays for health care services for individuals who meet their state’s poverty guidelines.

Medicare

– a federal health care program for most adults age 65 and older and certain disabled individuals. It pays for Long Term Care under limited circumstances and for limited periods of time.

Medicare Supplement Insurance (Medigap)

– private insurance to help pay hospital and medical costs Medicare does not cover. It pays for Long Term Care under limited circumstances and for limited periods of time.

Nonforfeiture

– a feature that provides some value in the event coverage is cancelled.

Nursing care

– services requiring the professional skills of a nurse (R.N.), licensed practical nurse (L.P.N.) or licensed vocational nurse (L.V.N.).

Nursing home

– a licensed facility that provides 24-hour-a-day room and board, nursing care and personal care services. Nursing homes also provide medical care, therapy and other health related services.

Original effective date

– the date that insurance coverage becomes effective.

Personal care

– care to help you meet personal needs such as bathing, dressing and eating.

Plan of care

– a plan prescribed by a licensed health care practitioner that identifies ways of meeting your need for Long Term Care services. To receive benefits under many Long Term Care insurance policies, you must have a written plan of care approved by the insurance company.

Pool of money

– see maximum lifetime benefit.

Portable coverage

– Once you have Long Term Care insurance coverage, you can keep it, even if you are no longer a member of the eligible group, as long as you continue to pay the required premium and have not exhausted your maximum lifetime benefit.

Premium

– the money paid to an insurance company for coverage.

Respite care

– services by a substitute provider, from a few hours to a few days, to give time off to the regular caregiver.

Severe cognitive impairment

– the deterioration or loss of intellectual capacity that requires substantial supervision by another person.

Spend down

– depletion of income and assets to meet eligibility requirements for Medicaid (Medi-Cal in California).

Spousal benefits

– options offered by some insurance programs to spouses. The options may include allowing spouses who both qualify for the insurance to pay premiums that are less than if each person had purchased individual coverage and/or allowing spouses to use each other’s benefits.

Standby assistance

– when you require the presence of another person, within arms reach of you, to help you perform the activities of daily living. Some insurance companies measure the inability to perform activities of daily living based on the need for standby assistance, rather than or in addition to hands-on assistance.

Substantial assistance

– hands-on or standby help required to perform activities of daily living.

Substantial supervision

– continual monitoring of a cognitively impaired person.

Tax-qualified

– conforming to federal standards that enable the enrollee in a Long Term Care insurance plan to receive federal tax advantages.

Terminal illness or terminally ill

– an illness or injury determined by a physician or other licensed healthcare professional to be likely to result in your death within six months.

Therapists; physical, speech and occupational

services provided in attempt to remediate health problems for individuals by maintaining and restoring maximum ability.

Toileting

– an activity of daily living: getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene related tasks.

Transferring

– an activity of daily living: the ability to move in or out of a bed, chair or wheelchair.

Underwriting

– the process of reviewing an individual’s health status to determine eligibility for coverage under a Long Term Care insurance plan.

Unlimited benefit period

– an option under some insurance plans that pays benefits for as long as you need care, subject to your daily benefit amount or weekly benefit amount. An unlimited benefit period is sometimes called a “lifetime benefit.”

Waiting period

– see Elimination Period.

Waiver of premium

– a provision of Long Term Care insurance plans that allows you to stop paying premiums while you are receiving benefits.

Weekly benefit amount

– a way of calculating benefits payable that is more flexible than a daily benefit amount. A weekly benefit amount is calculated by multiplying the daily benefit amount you choose times seven.

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