Shopper's Guide To Long Term Care Insurance
Hands-On Assistance – Physical assistance (minimal, moderate or maximal) without
which the individual would not be able to perform the activities of daily living.
Health Insurance Portability and Accountability Act (HIPAA) – Federal health
insurance legislation passed in 1996 that allows, under specified conditions, long
term care insurance policies to be qualified for certain tax benefits.
Home Health Care – Services for nursing care or occupational, physical, respiratory
or speech therapy. Also included are medical, social worker, home health aide, and
homemaker services.
Homemaker Services – Household services done by someone other than yourself
because you’re unable to do them.
Home for the Aged – A general term for a facility that cares for elderly people. It is
often not covered under a long-term care policy.
Hospice Care – Continuous care provided at home or in a facility with a home-like
setting for a terminally 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 not based on the specific service received or on the expenses
incurred. The insurance company only needs to decide if you are eligible for
benefits. Once the company determines you are eligible and you are receiving
eligible long-term care services, the insurance company will pay that 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 for expected 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 set time period. After the last premium payment, neither the
company nor the person can cancel the policy. These plans are more expensive
than continuous payment policies; however, their guaranteed fixed payment and
no-cancel features make them attractive to some people.
Medicaid – A joint federal/state program that pays for health care services for those
with low incomes or very high medical bills relative to income and assets.
Medicare – The federal program providing hospital and medical insurance to people
aged 65 or older and to certain ill or disabled persons. Benefits for nursing home
and home health services are limited.
Medicare Supplement Insurance – A private insurance policy that covers many of
the gaps in Medicare coverage (also called Medigap insurance coverage).
National Association of Insurance Commissioners (NAIC) – Membership
organization of state insurance commissioners. One of its goals is to promote
uniformity of state regulation and legislation related to insurance.
Non cancelable Policies – Insurance contracts that cannot be cancelled by the
insurance company and the rates cannot be changed by the insurance company.
Nonforfeiture Benefits – A policy feature that returns at least part of the premiums
to you if you cancel your policy or let it lapse.
Nursing Home – A licensed facility that provides general nursing care to those who
are chronically ill or unable to take care of daily living needs. May also be referred
to as a Long-Term Care Facility.
Paid-up Policy – When you prematurely stop paying your premiums, your insurance
policy is deemed to be paid-in-full. You do not pay any more premiums, but the
benefits you receive under this policy will be determined based on the amount of
premiums you have already paid, not on the level of benefits that you originally
purchased.
Partnership Policy – A type of policy that allows you to protect (keep) some of your assets if you apply for Medicaid after using your policy’s benefits. Not all states have these policies.
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