Long-Term Care Glossary

Activities of daily living (ADLs) are learned activities that each person performs to live a normal life.

Adult day care centers (ADCC) provide long-term health care to individuals during the day. They can help provide mental, social, and physical stimulation and fulfillment to aging or disabled adults.

An Alternate Care Benefit in a Long-Term Care Insurance policy provides the opportunity for the policy to cover benefits that might not be specifically outlined in the policy. Under this provision, the insurance company will consider paying for treatments, services, and supplies not specifically listed in the policy as long as it benefits the policyholder’s plan of care and be cost effective as well.

Alzheimer’s is the most famous and common form of dementia that inflicts many Americans, typically age 60 and above, although early-onset forms of the disease exist. There are over 3 million new cases diagnosed each year. This brain disorder is a progressive disorder that slowly destroys the memory and thinking skill of the individual inflicted.

In a Long-Term Care policy, it is coverage for items like physical, occupational, speech, respiratory therapies, wound care, medication management, supplies.

This is a professional determination of a person’s health that is generally part of the claims process in many Long-Term Care Insurance policies. Generally, a nurse or licensed health care practitioner would observe the physical and mental health status of an individual and their ability to perform everyday activities. This assessment, along with medical records and doctor’s statement, is used to determine benefits.

Generally referred to as a hybrid policy, this is an insurance policy which combines a life insurance policy or annuity with a rider for long-term care. Often paid with a single premium, this type of policy gives the policyholder either a benefit for long-term care or a death benefit.

A type of Long-Term care facility for individuals who need primarily non-skilled or semi-skilled custodial care services. It provides a trained staff on a 24 hour a day basis to provide services with an on-call physician available. Often, individuals who live in an assisted living facility have a higher level of independence than a person cared for in a nursing home. Generally, a resident will need help and assistance with some activities of daily living.

Typically, the first ADL a person requires assistance with, bathing is generally defined as the ability to wash oneself by sponge bath, either in a shower or tub. When a person needs an individual to assist them with this task, either with hands-on assistance or standby assistance, this would count as one of the six triggers to access benefits from a Long-Term Care Insurance policy.

If you are receiving benefits under a Long-Term Care policy and you need to leave a facility (assisted living facility, memory care facility, or nursing home) the policy will continue to pay to “reserve” your room or bed at the facility even though you are not there. The most common reason people need to leave a facility is to go to a hospital or rehab facility. This is important since the facility will either charge you for the room while you are away or you and your family may find the room is no longer available.

This is a named person, trust, or other legal entity which you can designate in a Long-Term Care Insurance policy to receive benefits from your policy after your death. This could include any return of premium or death benefit or reimbursement for care that occurred previous to your death.

The benefit period is the minimum period of time policyholders can receive Long-Term Care Insurance benefits.

A benefit trigger is a requirement that must be met before accessing Long-Term Care Insurance benefits. Once someone meets the benefit trigger requirements, they can file a claim and receive their benefits.

Many Long-Term Care Insurance policies provide professional assistance to develop a plan of care and help family members find providers and services based on the person’s needs and preferences. The case manager is chosen either by you, your family, your doctor, or by the insurance company. Generally, this person is a licensed nurse or social worker skilled in long-term care services and supports.

In a Long-Term Care Insurance policy, a Cash Benefit will pay a cash benefit, paid directly to the insured, once a person qualifies for benefits. With some policies, this can be the full benefit or a reduced benefit instead of the full reimbursement benefit offered by the policy. With some policies, this could be a cash benefit in addition to the normal reimbursed benefit paid to a provider.

Refers to care and services that help achieve functional independence for those with continuing and long-term health problems as opposed to "acute" care which refers to short term care of a severe illness. Chronic care is often used interchangeably with long-term care in the medical community.

This is a rider available on some life insurance policies which provides an acceleration of the policy holder’s death benefit if they are chronically ill and terminal. This allows the policyholder to use the death benefit to provide for care services prior to death.

Under law a “chronically ill individual” is any person who has been certified by a licensed health care practitioner as meeting one of three tests: (1) being unable to perform at least two of six specified activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of at least 90 days due to a loss of functional capacity; (2) having a level of disability similar to the ADL level of disability as determined under regulations prescribed in consultation with the Secretary of Health and Human Services; or (iii) requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.

In a Long-Term Care Insurance policy, this is a common contractual language that provides the insurance company to apply inflationary benefit increases to the remaining benefit pool of money within the policy instead of using the original amount.

A class is a group of people in a Long-Term Care Insurance policy having the same application date, policy form, sex, issue age, issue year, rate classification and state of issue in common. Since premiums with most Long-Term Care Insurance policies are intended to remain level, any approved rate increase by an insurance company can not impact just one person or a small group of persons, only a class of individuals.

This is the concept of sharing the cost of future long-term care services and supports with an insurance company. It refers to the amount of money that the insured must pay out-of-pocket to make-up the difference between their actual costs and the amount the policy covers. The greater the amount the insured is willing and able to "co-insure" the lower the policy benefits must be and therefore policy premiums.

Cognitive Impairment or cognitive loss describes when an individual starts to have problems remembering things be it a short-term or long-term memory. It also impacts a person’s ability to learn new things, the ability to concentrate or make decisions that affect an individual’s everyday life. Cognitive impairment ranges from mild to severe.

These are services designed to help elderly or chronically ill individuals which help them stay at home. These include services and programs such as meals on wheels and adult day care, that are designed to help care for people with chronic conditions and their functional capability. 

A compound inflation rider increases Long-Term Care Insurance benefits by a set percentage each year. Because this percentage is compounded, the benefits increase based on the new total. This can help offset increasing care costs.

A comprehensive Long-Term Care Insurance policy covers a majority of long-term health care services. These policies are regulated by federal laws and industry guidelines.

The ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag. It is one of the Activities of Daily Living used to trigger benefits in a Long-Term Care Insurance policy.

The opportunity in all tax-qualified Long-Term Care policies to provide the policyholder options in the event the insurance company gets approved a rate increase of over a certain percentage as listed in the policy. The policyholder may reduce coverage so that required premium payments are not increased or to convert to a paid-up status if there is a substantial premium increase.

A residential retirement community where a variety of living and medical services are provided to residents who are in need of continuous care and/or supervision. This is generally used by those with financial means which gives an individual or couple the opportunity to “age in place” after buying into the community.

Usually, the purchaser will live in an independent living section which could be a single-family home within the community, or a condo or apartment. As people require care, they can move within the same community to the assisted living section or the nursing home section.

This is an institution devoted to providing medical, nursing, or custodial care for an individual over a prolonged period, such as during the course of a chronic disease or the rehabilitation phase after an acute illness. Convalescent homes are staffed by medical professionals. They can provide both short-term care and recovery for patients after surgeries and long-term illness care.

The coordination of benefits provision is some policy contracts means a Long-Term Care policy will pay benefits only after any other insurance policy or government agency has made payment. It will not make payments on top of benefits from some other policy. This is to prevent the insured from making a profit from a policy.

An option that is offered on several Long-Term Care Insurance policies provides the insured the ability to increase their benefits on an annual basis based upon the Consumer Price Index. The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Under the provisions of the Health Insurance Portability and Accountability Act which became the law on January 1, 1997, persons who knowingly and willfully dispose of assets in order to become eligible for Medicaid payment of Long-Term Care expenses are subject to criminal penalties if doing so results in a period of ineligibility for Medicaid benefits.

This was modified by the Deficit Reduction Act (DRA) of 2005. The period of ineligibility is now 5 years. This law encourages people to plan for long-term care in advance and avoid hiding or disposing of assets in order to qualify for Medicaid benefits.

This is the type of long-term care service most people will require. When they need long term health care services. This is nonmedical help and assistance for an individual who requires either hands-on or standby assistance with activities of daily living like bathing, eating, dressing, using the bathroom, etc.). This care can be provided either at home, adult day care centers, assisted living facilities or in a nursing home.

The daily benefit for an LTC Insurance policy is the maximum amount of benefits the policy will pay for long-term care services on any given day of an active claim.

This is a law signed into law by President Bush in 2005 that significantly tightens the eligibility for Medicaid payment of long-term care services. The law changed the look-back period for asset transfers from 3 years to 5 years. It also provided for Qualified State Long Term Care Partnerships, which permit States with approved State Plan Amendments (SPA) to exclude from estate recovery the amount of long-term care benefits paid under a qualified Long-Term Care Insurance policy.

Dementia is a general term which is used to describe a person’s decline in mental ability severe enough to interfere with their daily life. Alzheimer's is the most common type of dementia. There are several symptoms of dementia. These include general long-term or short-term memory loss, word-finding difficulties, and impaired judgment. Those who suffer from dementia usually will have issues with their normal day-to-day activities. Typically, those who suffer from dementia require supervision in order to protect themselves and the people around them.

This is the type of equipment that is primarily being used for a medical purpose as opposed to comfort and convenience. This type of equipment is designed for repeated use. This can include walkers, hospital beds, crutches, wheelchairs, ramps and prosthetics used for in-home care.

An elimination period is a time between qualifying for Long-Term Care Insurance benefits and receiving them. These are also referred to as waiting periods.

All Long-Term Care Insurance policies specify certain situations in which they will not pay benefits. These usually include care which is required as a result of an act of war, care required as a result of an intentionally self-inflicted injury, and care required as a result of alcoholism or drug addiction. Every insurance company has its own exclusions but they tend to be very limited and well defined.

A Long-Term Care policy where benefits are only paid if the policyholder is receiving care in a licensed facility, e.g. a Nursing Home or Assisted Living Facility.

This is the period of time where a person who has been approved for a Long-Term Care policy has to review their policy without cost or obligation. Most states allow you to "refuse" a policy usually within 30 days of delivery of the policy.

A form of inflation protection in a Long-Term Care Insurance policy where the insured has the right to increase benefits periodically (e.g., every 3 years) to reflect increases in the cost of care. These increases can be elected without providing evidence of insurability as long as the insured is not receiving benefits at the time.

All tax-qualified Long-Term Care Insurance policies are “guaranteed renewable”. The insurance company guarantees that the policy cannot be canceled as long as the insured pays the premium and the policy benefits are not exhausted. 

This refers to the physical assistance of another person, without which the person would be unable to perform an activity of daily living (ADL).

The Health Insurance Portability and Accountability Act of 1996, known as the Kennedy–Kassebaum Act, was enacted by the 104th United States Congress and signed by President Bill Clinton in 1996. It became law on January 1, 1997. The Act, in part, 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 to be considered taxable income.

This is an individual who is providing home health care services and supports in a person’s home under the supervision of a doctor, nurse, or physical, respiratory, speech or occupational therapist. Adult day care centers, memory care facilities, and nursing homes may also employ “aides” in addition to other higher skilled staff.

This provides additional services in a Long-Term Care policy for a person to provide laundry, housekeeping, transportation, and shopping assistance when provided in conjunction with other home care services. Often, these services are provided by a home health aide who is also providing other services

Hospice is short-term, supportive care for the terminally ill which focuses on pain management, emotional, physical, and spiritual support for the patient and family. It can be provided at home, in a hospital, nursing home, or a hospice facility.

This is a philosophy of care which focuses on the palliation (meaning it makes the individual feel better, despite the fact the care will not cure the person). Those individuals who are chronically ill, terminally ill or seriously ill patient's pain and symptoms are very difficult on them and their families.

Also known as a “linked benefit” policy, a hybrid Long-Term Care policy links a permanent life insurance policy, or annuity, with a tax-qualified Long-Term Care Insurance rider. If the long-term care benefit is not used or is only partially used, the unused death benefit is paid out to policyholder’s heirs like any other life insurance policy or annuity would do.

Since these “hybrid” policies include a tax-qualified Long-Term Care policy, the trigger for benefits is like any other Long-Term Care policy (your need for assistance with two of the six activities of daily living or supervision due to cognitive decline). Unlike some life insurance policies that feature an accelerated death benefit if you are deemed critically ill and terminal, the hybrid plan provides complete long-term care benefits along with a death benefit. The policyholder will either get the tax-free long-term care benefit, the death benefit, or even both if they have not exhausted the full amount of the death benefit as a long-term care benefit.

This is the inability for a person to maintain control of their bowel or bladder. This could be from a partial loss of control to complete loss control. In a Long-Term Care policy, it would include the inability to perform associated personal hygiene (including caring for catheter or colostomy bag). This is one of the Activities of Daily Living used to trigger benefits in a Long-Term Care Insurance policy.

This is a fixed amount of money paid to a policyholder when care is received, regardless of the cost of care. A policy with a $100 a day Indemnity Benefit will pay $100 a day for each day you qualify for care regardless of the expense incurred. Indemnity Benefits require that care be received. See also Cash Benefit.

In a Long-Term Care Insurance policy, a rider can be purchased to provide additional benefits over time to address the higher costs of care due to inflation. Usually, the policyholder can choose between Simple and Compound increases. Simple increases add the same dollar amount to the monthly or daily benefit each year. Compound inflation protection increases the benefit by a percentage of the current benefit. Since the cost of care increases has a compound effect, compound protection is generally more likely to keep up with the cost of care. Partnership rules require compound inflation at most ages.

This is care provided by family or friends. Some Long-Term Care policies provide benefits for Informal care. Whether benefits are available may depend on the relationship of the caregiver to the insured, and on whether the caregiver lives with the insured. A care coordinator or medical professional may be required to supervise this care.

These are the skills necessary to live independently but not necessary for fundamental functioning. IADLs, for instance, would include shopping, preparing meals, taking medications, paying bills, etc. Persons unable to perform one or more of these without assistance are said to have an IADL limitation.

This is a health facility that provides medically related services to persons with a variety of physical or emotional conditions requiring institutional facilities but without the degree of care provided by a hospital or skilled nursing facility. 

This is a health facility that provides medically related services to persons with a variety of physical or emotional conditions requiring institutional facilities but without the degree of care provided by a hospital or skilled nursing facility. This is care for stable conditions requiring daily but not 24-hour nursing supervision.

This is a provision is some Long-Term Care Insurance contracts which allows for the insured to receive benefits outside the United States and U.S. territories.

This is the termination of a Long-Term Care Insurance policy due to the policyholder's failure to pay the required premium. Many policies have protections against unintentional lapses.

Policyholder's on some Long-Term Care Insurance policies can pay past-due premiums and reinstate their policies in a specified period of time after they have lapsed the policy. If the failure to pay was the result of cognitive or functional impairment additional protections are provided. In some cases, an insurance company will notify the third party of your choosing to be contacted if your premium bill goes past due. 

Sometimes referred to as “Maximum Lifetime Benefit” it is the set limit on the amount of benefits that a Long-Term Care policy will pay. These limits are set in terms of either years or dollars, but not both. You will usually be given a choice of lifetime limits. These limits increase with an inflation factor that the policyholder has selected. 

The same as “Lifetime Limits”. This is the maximum amount of benefits which a Long-Term Care Insurance policy will pay over the life of a policy. Generally, this is a dollar amount which can grow with inflation. 

A premium payment option some Long-Term Care policies offer in which the person pays premiums for a set time period. The options are generally 10 years, 15 years, 20 years, or to age 65. The policyholder will pay a higher premium in order to enjoy the shorter payment period. 

Long-term care addresses the medical and non-medical needs of individuals with chronic illnesses, disabilities, or dementia who cannot care for themselves. Long-term care is legally defined as care expected to last at least 90 days. Long-term care is often abbreviated as "LTC" and may also be referred to as "long-term health care."

In order to qualify for Long-Term Care benefits under Medicaid in the past, many people tried to "give away" money to children or transfer assets to a "safe" financial vehicle. In response, federal law requires Medicaid will now "look-back" to any asset transfers you have made in the 5 years before applying for Medicaid benefits.

This is 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 monthly income are below certain allowed levels.

This is the reasonable and appropriate diagnosis, treatment, and follow-up care (including supplies, appliances, and devices) as determined and prescribed by qualified appropriate health care providers in treating any condition, illness, disease, or injury. 

Medicare is health insurance primarily for people 65 or older, those with certain health issues, or those who qualify for disability. This federal tax-supported program becomes an individual’s primary health insurance at age 65.

Medigap or Medicare Supplement policies are private insurance policies that pay for care that is approved but not paid by Medicare. Typically Medigap policies pay part or all of the coinsurance and deductibles associated with Medicare coverage. 

Refers to a mental or emotional disease or disorder of any kind that does not have an organic origin. Both Alzheimer's and senile dementia are considered organic in origin: insurance companies will cover these in a Long-Term Care policy and it should say clearly that "Alzheimer's Disease, senile dementia, and other organic" brain disorders are covered by the policy.

Otherwise known as the Community Spouse Resource Allowance, or "CSRA," is the amount of countable assets a spouse is allowed to hold without disqualifying an individual from Medicaid. For Medicaid eligibility purposes, all assets held by a person or their spouse or jointly together are considered, regardless of the name in which they're held or any prenuptial or postnuptial agreements that may have been put into place. For the purposes of qualifying for the Medicaid Long-Term Care benefit the total countable assets must be less than the Minimum Asset Allowance (CSRA - your spouse's maximum) plus $2,000 (your maximum).

Income, as well as asset limits, must be met in order to qualify for Medicaid’s Long-Term Care benefits.  This is the allowed amount of income a person may have and still qualify for the benefit.

This is a rider on a Long-Term Care Insurance policy that says if you stop paying the premium on a policy (lapse), it will provide a residual benefit to the policyholder. Often this is a paid-up policy providing your regular benefit for a shortened period of time. Another form of Nonforfeiture is a return of some part of the money you have paid, called "return of premium" (see Return of Premium). The amount of nonforfeiture benefit depends on how long you have held and paid premiums on the policy. 

This is a facility which provides skilled, intermediate or custodial nursing care which must be state- licensed.

The Long-Term Care Partnership program originated in the 1980s and at that time was implemented in four states: New York, California, Connecticut and Indiana. The partners were the insurance companies and the states and the state Medicaid departments. Policies that met the requirements of one of these states allowed buyers to shelter assets from Medicaid (asset disregard), in case they exhausted their Long-Term Care Insurance benefits and then became Medicaid beneficiaries.

This is non-medical care and assistance needed to help a person perform activities of daily living and/or supervision and assistance for someone suffering from a severe cognitive impairment. Most health insurance plans do not cover custodial or personal care but are limited to acute or rehabilitative skilled-care. Long-Term Care Insurance plans were therefore designed to cover these services.

This is a documented, individualized plan of long-term care services prepared by a Licensed Health Care Practitioner (LHCP). Typically, a Plan of Care would include the types and frequency of care needed and whether the care was to be provided by family caregivers or through formal paid care providers.

see Lifetime Maximum Benefit

A pre-existing condition is a health condition that an individual had before they applied for Long-Term Care Insurance.

This is the amount of money that a policyholder pays to an insurance company in order to keep an insurance policy in force.

Rate increases on existing Long-Term Care Insurance policies may be sought by an insurance company only if they prove a substantial need based on actuarial reasons and impacting a "class" of individuals. They may never increase a premium to just one policyholder due to changes in health or claim's status.

Developed by the National Association of Insurance Commissioners (NAIC), these are rules put in place to make it more difficult for insurance companies to raise premiums on Long-Term Care Insurance. Known as Long-Term Care Insurance Model Regulation, policies that were issued after the state adopted this rate stability model are given clear guidelines which give consumers additional peace-of-mind when purchasing a Long-Term Care Insurance policy.  The rules help prevent the repeating of pricing errors with older legacy policies by placing more rules and guidelines on insurance companies and their actuaries and the regulators themselves.

These rules on today’s Long-Term Care Insurance help ensure premiums remain stable but affordable.

Reimbursement is the standard way that a Long-Term Care Insurance policy will pay the policyholder (or provider) at the time of claim. The insured or a care provider submits a claim for the charges for the care delivered, and the claim is paid up to the daily or monthly maximum specified in the policy.

In a Long-Term Care policy Respite Care is a paid caregiver provided to the policyholder in order to give relief to an informal caregiver in order to give them a break or relief. Most Long-Term Care policies pay for Respite Care, usually limited by a certain number of days in a year.

This is a rider on a Long-Term Care Insurance policy that allows for a partially used benefit to be fully restored if a person recovers and no longer requires care for a specified period of time, typically 180 days.

This is an option on some Long-Term Care Insurance policies which will allow for the return of some or all paid premium following your death. The amount returned is often based on the total amount of premium you have paid in; minus any claims the policyholder paid into the policy.

This is an additional benefit provision, usually added at extra cost, that changes the provisions of the base policy.

Loss or deterioration in mental capacity that is comparable to Alzheimer's Disease and similar forms of irreversible dementia, and is documented by clinical evidence and standardized tests of memory, orientation as to people, places, and time; and deductive or abstract reasoning.

This is a rider which can be included in a Long-Term Care policy which has become very popular for couples. Shared Care allows unused benefits to be used by a spouse or partner. This option is available when spouses or domestic partners both buy policies with identical benefits. With some Long-Term Care Insurance contracts, the option creates a “third pool of money” equal to the individual benefit pool in each policy. 

This is a rider on a Long-Term Care policy where the benefit increases by a fixed amount per year based on the original starting amount. For example, with 5% simple inflation, $100 a day would increase each year by $5.00. The equation: 100 x .05 = 5. Each year the benefit in this example would increase by $5.00 a day. Compound inflation would complete the equation by adding the 5% in this example to the new total, not the original total.

Skilled care is medical care or assistance provided by a registered nurse or professional therapist. Skilled care is usually provided within a licensed facility, such as a nursing home.

This is a process of spending an individual’s savings on long-term care services and supports until their assets are depleted enough to qualify for Medicaid, the medical welfare program. Single individuals must have no more than $2,000 in assets (in most states - not including primary home, a car, personal effects, and burial expenses) before Medicaid will pay long-term care benefits.

Standby Assistance means the presence of another person within arm's reach of an individual that is necessary to prevent their injury while the person is performing an activity of daily living. It is sometimes referred to as Supervisory Assistance.

This is a feature on a Long-Term Care policy which allows a policyholder to reduce their coverage in exchange for a lower premium. For example, a policyholder could reduce the monthly or daily benefit, the maximum lifetime benefit pool, or increase the days in the elimination period. 

Tax-qualified Long-Term Care policies require a policyholder to need "substantial assistance" in performing at least two activities of daily living in order to receive benefits. "Substantial Assistance" is defined as either "hands-on assistance" or "standby assistance".

This is the continual supervision (such as cuing by verbal prompting, gestures, or other demonstrations) that is required in order to protect the cognitively impaired individual from threats to his or her health or safety. An example is a need for someone to be present to prevent the individual from wandering.

This is a rider which can be purchased by a couple. If both spouses who own a Long-Term Care policy upon the death of one spouse, convert the policy of the surviving spouse to paid-up status. 

A Long-Term Care policy which meets certain requirements will qualify for favorable tax treatment. Buyers of Tax-Qualified (TQ) plans can deduct the premiums if they itemize deductions on their federal tax return based on their Adjusted Gross Income itemization requirement. The maximum deductible amount depends on age and is adjusted annually for inflation. 

One of the Activities of Daily Living used to trigger benefits under a Long-Term Care policy. This is generally defined as getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene activities. (See also Activities of Daily Living.)

One of the Activities of Daily Living used to trigger benefits in a Long-Term Care policy. Transferring is the activity of getting into and out of bed or a chair or wheelchair. (See also Activities of Daily Living.)

Underwriting is a process insurance companies use to calculate the risk of insuring new individuals.

A provision that a policyholder of a Long-Term Care Insurance policy will not have to pay the premiums after receiving benefits from a policy.