LTC Insurance - Glossary

Frequently Asked Questions

 

Activities of Daily Living

The activities of daily living are six standard activities recognized by government, medical, and insurance professionals. They are: Dressing, Bathing, Transferring (moving from bed to chair, etc.), Continence, Eating, Toileting.

Medicaid

Medicaid was set up by Title XIX of the Social Security Act of 1965 and funded by Federal and State agencies, Medicaid offers reimbursement to doctors and hospitals for care of the very poor. There are stict income-based limits on eligibility.

Medicare

Medicare is a U.S. government program under the Social Security Administration that functions as medical and hospitalization insurance for qualified people above age 65 and certain disabled people under age 65.

Medicare Supplement Insurance

Medicare supplement insurance is sold by private insurance companies. By law, only 12 plans (A through L) can be sold. None of them include Long Term Care benefits.

Non-Forfeiture Clause

This is a clause in LTC Insurance policies that allows for the policy to remain in force under specific conditions for a limited time if the premium is unpaid following the grace period. There is an additional charge for this option.

Non-Tax Qualified Long Term Care Insurance

Non-tax qualified LTC Insurance is a plan where premiums and benefits may be taxed. Benefit provisions are much less restrictive than Tax Qualified LTC Insurance.

Tax Qualified Long Term Care Insurance

Tax Qualified LTC Insurance is defined in the Health Insurance Portability and Accountability Act (HIPAA). The premiums paid for this form of LTC Insurance are tax deductible and the benefits are not taxed as income. There are restrictions on accessibility of benefits and annual requirements for continued payment of benefits.

Restoration of Benefits

This Long Term Care Insurance policy option allows for a restoration to maximum available benefits if a specified time elapses between claims. There is an additional charge for this option.

Return of Premium

In the event that the insured dies before collecting benefits exceeding the amount of long term care insurance premiums paid, a percentage of the exess premium is returned to a designated beneficiary. There are many restrictions and there is an extra charge for this option.