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Long-term care glossary
Plain-English definitions of the terms you'll run into when comparing long-term care insurance.
A
- Accelerated Death Benefit
- A feature of a life insurance policy that lets you use some of the policy's death benefit prior to death.
- Activities of Daily Living (ADLs)
- Everyday functions individuals usually do without help: bathing, continence, dressing, eating, toileting, and transferring. Many policies use the inability to do a certain number of ADLs (such as two of six) to decide when to pay benefits.
- Adult Day Care
- Care provided during the day at a community-based center for adults who need assistance or supervision during the day — including help with personal care — but who do not need round-the-clock care.
- Alzheimer's Disease
- A progressive, degenerative form of dementia that causes severe intellectual deterioration.
- Assisted Living Facility
- A residential arrangement providing individualized personal care and health services for people who need help with activities of daily living, while keeping a relatively independent lifestyle. Facilities vary in size and in the levels of care offered.
B
- Bathing
- Washing oneself by sponge bath or in a tub or shower, including getting into or out of the tub or shower.
- Benefit Triggers (Triggers)
- The criteria an insurance company uses to determine when you become eligible to receive benefits — typically needing help with a set number of ADLs, or having a cognitive impairment.
- Benefits
- The monetary sum paid or payable to a recipient for which the insurance company has received premiums.
C
- Care Management Services
- A service in which a professional, typically a nurse or social worker, arranges, monitors, or coordinates long-term care services (also called care coordination).
- Cash Surrender Value
- The amount you may be entitled to receive from the insurer if you terminate a life insurance or annuity policy, as stated in the policy.
- Chronic Illness
- An illness marked by permanency, residual disability, a need for rehabilitation, or a long period of supervision, observation, or care.
- Chronically Ill
- A term used in a tax-qualified long-term care contract for a person who needs care because of an inability to perform ADLs without help, or because of a severe cognitive impairment.
- Cognitive Impairment
- A deficiency in short- or long-term memory; orientation as to person, place, and time; deductive or abstract reasoning; or judgment as it relates to safety awareness.
- Community-Based Services
- Services designed to help older people stay independent and in their own homes.
- Continence
- The ability to control bowel and bladder function; or, when unable to, the ability to perform associated personal hygiene (including caring for a catheter or colostomy bag).
- Continuing Care Retirement Community (CCRC)
- A retirement complex that offers a broad range of services and levels of care, from independent living through skilled nursing.
- Continuous Payment Option
- A premium option requiring you to pay premiums until you trigger your benefits. Premiums are usually the lowest available, but the insurer can raise them for an entire class of policies.
- Custodial Care (Personal Care)
- Care to help individuals meet personal needs such as bathing, dressing, and eating. It can be provided by someone without professional training.
D
- Daily Benefit
- The amount of insurance benefit, in dollars, a person chooses to buy for long-term care expenses.
- Dementia
- Deterioration of intellectual faculties due to a disorder of the brain.
- Disability Method
- A method of paying benefits that requires only that you meet the eligibility criteria; once you do, you receive your full daily benefit whether or not you are receiving paid services.
- Dressing
- Putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs.
E
- Eating
- Feeding oneself by getting food into the body from a receptacle, or by feeding tube or intravenously.
- Elimination Period
- A type of deductible: the length of time you must pay for covered services before the insurer begins paying. A longer elimination period lowers the premium. Sometimes called a "waiting period."
- Extended Term Benefits
- A nonforfeiture option providing full benefits for a reduced time period after a lapse; if not used within a set number of years, the coverage terminates.
G
- Guaranteed Renewable
- A policy the insurer cannot cancel and must renew, except for nonpayment of premiums. The insurer may raise premiums, but only for an entire class of policies — not yours individually.
H
- Hands-On Assistance
- Physical assistance (minimal, moderate, or maximal) without which the individual could not perform the activities of daily living.
- Health Insurance Portability and Accountability Act (HIPAA)
- Federal legislation passed in 1996 that allows, under specified conditions, long-term care insurance policies to qualify for certain tax benefits.
- Home Health Care
- Services such as nursing care; occupational, physical, respiratory, or speech therapy; and medical social worker, home health aide, and homemaker services.
- Homemaker Services
- Household services performed by someone other than yourself because you are unable to do them.
- Home for the Aged / Personal Care Home / Rest Home
- General terms for a facility that cares for elderly people. Such facilities are often not covered under a long-term care policy.
- Hospice Care
- Continuous care provided at home or in a home-like setting for a terminally ill person (life expectancy of six months or less).
I
- Indemnity Method
- A method of paying benefits in which a set dollar amount is paid to you once you are eligible and receiving covered services, regardless of your actual expenses, up to the policy limit.
- Inflation Protection
- A policy option that increases benefit levels over time to help keep pace with rising long-term care costs.
L
- Lapse
- Termination of a policy when a renewal premium is not paid.
- Limited Payment Option
- A premium option in which you pay premiums for a set period (such as 10 years or to age 65). After the last payment the policy is paid up. These cost more than continuous-payment policies but remove future premium risk.
M
- Medicaid
- A joint federal/state program that pays for health and long-term care services for those with low income 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 (Medigap)
- A private insurance policy that covers many of the gaps in Medicare coverage.
N
- National Association of Insurance Commissioners (NAIC)
- A membership organization of state insurance commissioners that promotes uniformity in state insurance regulation and legislation.
- Noncancelable Policy
- An insurance contract that cannot be cancelled by the insurer, and whose rates the insurer cannot change.
- Nonforfeiture Benefits
- A policy feature that returns at least part of your premiums (as reduced benefits) if you cancel your policy or let it lapse.
- Nursing Home
- A licensed facility providing general nursing care to those who are chronically ill or unable to manage daily living needs. Also called a long-term care facility.
P
- Paid-up Policy
- A policy on which you have stopped paying premiums; benefits are based on the premiums already paid rather than the level originally purchased.
- Partnership Policy
- A policy that lets you protect (keep) some of your assets if you apply for Medicaid after using your policy's benefits. Not all states offer these.
- Pre-existing Condition
- An illness or disability for which you were treated or advised within a set time period before applying for a policy.
R
- Reduced Paid-up Benefits
- A nonforfeiture option that reduces your daily benefit but keeps the full benefit period until death. The reduction depends on how much premium you have paid.
- Rescind
- When the insurance company voids (cancels) a policy.
- Respite Care
- Care provided by a third party that gives family caregivers an occasional break — from a few hours to several days.
- Rider
- An addition to an insurance policy that changes its provisions.
S
- Shortened Benefit Period
- A nonforfeiture option that reduces the benefit period but keeps the full daily maximum until death. The reduction depends on how much premium you have paid.
- Skilled Care
- Daily nursing and rehabilitative care that can be performed only by, or under the supervision of, skilled medical personnel; it must be ordered by a physician and follow a plan of care.
- Spend Down
- Using up most of your income and assets to meet Medicaid eligibility requirements.
- Stand-by Assistance
- A caregiver staying close to watch over the individual and provide physical help if necessary.
- State Health Insurance Assistance Program (SHIP)
- A federally funded program that trains volunteers to provide free counseling on the insurance needs of senior citizens.
- Substantial Assistance
- Hands-on or stand-by help required to perform ADLs.
- Substantial Supervision
- The presence of a person directing and watching over someone who has a cognitive impairment.
T
- Tax-Qualified Long-Term Care Policy
- A policy that conforms to certain federal standards and offers certain federal tax advantages. Most policies sold today are tax-qualified.
- Term Life Insurance
- Life insurance covering a person for a set term; it pays a death benefit only if you die during that term and generally builds no cash value.
- Third Party Notice
- A benefit that lets you name someone the insurer will notify if your coverage is about to end for nonpayment — for example, a relative, friend, or professional.
- Toileting
- Getting to and from the toilet, getting on and off, and performing associated personal hygiene.
- Transferring
- Moving into and out of a bed, chair, or wheelchair.
U
- Underwriting
- The process of examining, accepting or rejecting insurance risks and classifying those selected, in order to charge the proper premium.
- Universal Life Insurance
- A flexible life insurance policy that lets you vary premium payments and adjust the coverage amount.
W
- Whole Life Insurance
- A policy that builds cash value and covers a person for life as long as premiums are paid.
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