Long Term Care Glossary

Accelerated Death Benefit A feature of a life insurance policy that lets you use some of thepolicy's death benefit prior to death.
Activities of Daily Living (ADLs) Everyday functions and activities individuals usually do withouthelp. ADLs 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) todecide when to pay benefits.
Adult Day Care Care provided during the day at a community-based center for adults who needassistance or supervision during the day including help with personal care, but who do notneed round-the-clock care.
Alzheimer's Disease A progressive, degenerative form of dementia that causes severe intellectualdeterioration.
Assisted Living Facility A residential living arrangement that provides individualized personal careand health services for people who require assistance with activities of daily living. The typesand sizes of facilities vary; they can range from a small home to a large apartment-stylecomplex. They also vary in the levels of care and services that can be provided. Assistedliving facilities offer a way to keep a relatively independent lifestyle for people who don't needthe level of care provided by nursing homes.
Bathing Washing oneself by sponge bath, in either a tub or shower. This activity includes the taskof getting into or out of the tub or shower.
Benefit Triggers (Triggers) Term used by insurance companies to describe the criteria and methodsthey use to determine when you are eligible to receive benefits.
Benefits Monetary sum paid or payable to a recipient for which the insurance company has receivethe premiums.
Care Management Services A service in which a professional, typically a nurse or social worker, mayarrange, monitor, or coordinate long term care services (also referred to as care coordinationservices).
Cash Surrender Value The amount of money you may be entitled to receive from the insurancecompany when you terminate a life insurance or annuity policy. The amount of cash value willbe determined as stated in the policy.
Chronic Illness An illness with one or more of the following characteristics: permanency, residualdisability, requires rehabilitation training, or requires a long period of supervision,observation, or care.
Chronically Ill A term used in a tax-qualified long term care contract to describe a person who needslong term care either because of an inability to do everyday activities of daily living (ADLs)without help or because of a severe cognitive impairment.
Cognitive Impairment A deficiency in a person's short-or long term memory; orientation as toperson, place and time; deductive or abstract reasoning; or judgment as it relates to safetyawareness.
Community Based Services Services designed to help older people stay independent and in theirown homes.
Continence The ability to maintain control of bowel and bladder function; or when unable tomaintain control these functions, the ability to perform associated personal hygiene(including caring for catheter or colostomy bag).
Continuing Care Retirement Communities (CCRC) A retirement complex that offers a broad rangeof services and levels of care.
Continuous Payment Option A premium payment option that requires you to pay premiums untilyou trigger your benefits. Premiums are usually paid on a monthly, quarterly, semi-annual orannual basis. The policy is not cancelable except when premiums aren't paid; however, theinsurance company can increase premiums on an entire class of policies. Premiums areusually the lowest available.
Custodial Care (Personal Care) Care to help individuals meet personal needs such as bathing,dressing, and eating. Someone without professional training may provide care.
Daily Benefit The amount of insurance benefit in dollars a person chooses to buy for long term careexpenses.
Dementia Deterioration of intellectual faculties due to a disorder of the brain.
Disability Method Method of paying benefits that only requires you to meet the benefit eligibilitycriteria. Once you do, you receive your full daily benefit.
Dressing Putting on and taking off all items of clothing and any necessary braces, fasteners orartificial limbs.
Eating Feeding oneself by getting food into the body from a receptacle (such as a plate, cup ortable) or by a feeding tube or intravenously.
Elimination Period A type of deductible; the length of time the individual must pay for coveredservices before the insurance company will begin to make payments. The longer theelimination period in a policy, the lower the premium. Sometimes also called a "waitingperiod."
Expense Incurred Method Method of paying benefits where the insurance company must decide ifyou are eligible for benefits and if your claim is for eligible services. Your policy or certificatewill pay benefits only when you receive eligible services. Once you have incurred an expensefor an eligible service, benefits are paid either to you or your provider. The coverage will payfor the lesser of the expense you incurred or the dollar limit of your policy. Most policiesbought today pay benefits using the expense-incurred method.
Extended Term Benefits Full benefits for a reduced time period, applicable for use during a certainperiod of time. If not used in a set number of years after the lapse, then you lose it. Once theperiod has expired, the contract terminates.
Guaranteed Renewable When a policy cannot be cancelled by an insurance company and must berenewed when it expires unless benefits have been exhausted. The company cannot changethe cover-age or refuse to renew the coverage for other than nonpayment of premiums(including health conditions and/or marital or employment status). In a guaranteedrenewable policy, the insurance company may increase premiums, but only on an entire classof policies, not just on your policy.
Hands-On Assistance Physical assistance (minimal, moderate or maximal) without which theindividual would not be able to perform the activity of daily living.
Health Insurance Portability and Accountability Act (HIPAA) Federal health insurance legislationpassed in 1996 that allows, under specified conditions, long term care insurance policies tobe qualified for certain tax benefits.
Home for the Aged A general term for a facility that cares for elderly people. It is often not coveredunder a long term care policy.
Home Health Care Services for occupational, physical, respiratory, or speech therapy, or nursingcare. Also included are medical, social worker, home health aide, and homemaker services.
Homemaker Services Household services done by someone other than yourself because you'reunable to do them.
Hospice Care Continuous care provided at home or in a facility with a homelike setting for aterminally ill person. A terminally ill person has a life expectancy of six months or less.
Indemnity Method Method of paying benefits where the benefit is a set dollar amount and is notbased on the specific service received or on the expenses incurred. The insurance companyonly needs to decide if you are eligible for benefits. Once the company determines you areeligible and you are received eligible long term care services, the insurance company will paythat set amount directly to you up to the limit of the policy.
Inflation Protection A policy option that provides for increases in benefit levels to help pay forexpected increases in the costs of long term care services.
Lapse Termination of a policy when a renewal premium is not paid.
Limited Payment Option A premium payment option in which the person pays premiums for a settime period. After the last premium payment, neither the company nor the person cancancel the policy. These plans are more expensive than continuous payment policies;however, their guaranteed fixed payment and no-cancel features make them attractive tosome persons.
Medicaid A joint federal/state program that pays for health care services for those with lowincomes or very high medical bills relative to income and assets.
Medicare The federal program providing hospital and medical insurance to people aged 65 or olderand to certain ill or disabled persons. Benefits for nursing home and home health services arelimited.
Medicare Supplement Insurance A private insurance policy that covers many of the gaps inMedicare coverage (also called Medigap insurance coverage).
Noncancelable Policies Insurance contracts that cannot be cancelled by the insurance companyand the rates can not be changed by the insurance company.
Nonforfeiture Benefits A policy feature that returns at least part of the premiums to you if youcancel your policy or let it lapse.
Nursing Home A licensed facility that provides general nursing care to those who are chronically illor unable to take care of daily living needs. May also be referred to as a Long Term CareFacility.
Paid-up Policy When you prematurely stop paying your premiums, your insurance policy is deemedto be paid-in-full. You do not pay any more premiums, but the benefits you receive under thispolicy will be determined based on the amount of premiums you have already paid, not onthe level of benefits that you originally purchased.
Partnership Policy A type of policy that allows you to protect (keep) some of your assets if youapply for Medicaid after using your policy's benefits. Only a few states have these policies.
Personal Care (Custodial care) Care to help individuals meet personal needs such as bathing,dressing, and eating. Someone without professional training may provide care.
Personal Care Home A general term for a facility that cares for elderly people. It is often not coveredunder a long term care policy.
Pre-existing Condition Illnesses or disability for which you were treated or advised within a timeperiod before applying for a life or health insurance policy.
Reduced Paid-up Benefits A nonforfeiture option that reduces your daily benefit but retains the fullbenefit period on your policy until death. For example, you buy a policy for three year ofcoverage with $150 daily benefit. Then if you let the policy lapse, the daily benefit will bereduced to $100. The exact amount of the reduction depends upon how much premium youhave paid on the policy. The benefit period on your policy continues to be three years. Unlikeextended term benefits, which must be used in a certain amount of time after the lapse, youcan use reduced paid-up benefits at any time after you lapse (until death).
Rescind When the insurance company voids (cancels) a policy.
Respite Care Care provided by a third party that relieves family caregivers for a few hours toseveral days and gives them an occasional break from daily caregiving responsibilities.
Rest Home A general term for a facility that cares for elderly people. It is often not covered undera long term care policy.
Rider Addition to an insurance policy that changes the provisions of the policy.
Shortened Benefit Period A nonforfeiture option that reduces the benefit period but retains the fulldaily maximums applicable until death. The period of time for which benefits are paid will beshorter. For example, you buy a policy for three years of coverage with $150 daily benefit, butif you let the policy lapse, the benefit period is reduced to one year, with full daily benefitspaid. The exact amount of the reduction depends upon how much premium you have paidon the policy. Unlike extended term benefits, which must be used in a certain amount of timeafter the lapse, you can use shortened benefits at any time after you let the premium lapse(until death).
Skilled Care Daily nursing and rehabilitative care that can be performed only by, or under thesupervision of, skilled medical personnel. This care is usually needed 24 hours a day, mustbe ordered by a physician, and must follow a plan of care. Individuals usually get skilled carein a nursing home but may also receive it in other places.
Spend Down A requirement that an individual use up most of his or her income and assets to meetMedicaid eligibility requirements.
Stand by Assistance Caregiver stays close to the individual to watch over the individual and toprovide physical assistance if necessary.
State Health Insurance Program Federally funded program to train volunteers to providecounselingon the insurance needs of senior citizens. See pages 54 for a list of State HealthInsurance Programs.
Substantial Assistance Hands-on or standby help required to do ADLs.
Substantial Supervision The presence of person directing and watching over another who has acognitive impairment.
Tax-Qualified long term Care Insurance Policy A policy that conforms to certain standards infederal law and offers certain federal tax advantages.
Term Life Insurance Covers a person for a period of one or more years. It pays a death benefit onlyif you die during that term. It generally does not build a cash value.
Third-Party Notice A benefit which lets you name someone who the insurance company wouldnotify if your coverage is about to end because the premium hasn't been paid. This can be arelative, friend, or professional such as a lawyer or accountant, for example.
Toileting Getting to and from the toilet, getting on and off the toilet and performing associatedpersonal hygiene.
Transferring Moving into and out of a bed, chair or wheelchair.
Triggers (Benefit Triggers) Term used by insurance companies to describe when to pay benefits.
Underwriting The process of examining, accepting, or rejecting insurance risks, and classifyingthose selected, to charge the proper premium for each.
Universal Life Insurance A kind of flexible policy that lets you vary your premium payments andadjust the face amount of your coverage.
Waiver of Premium A provision in an insurance policy that relieves the insured of paying thepremiums while receiving benefits.
Whole Life Insurance Policies that build cash value and cover a person for as long as he or she livesif premiums continue to be paid.