Long-Term Care Glossary

Find and explore keywords used in the long-term care industry.

These definitions are intended to give you a broad understanding of the most commonly used terms used in long-term care. Always review an official definition as listed in a policy.

Activities of Daily Living (ADL's)

Our ability to perform these “learned" activities are often compromised due to an illness, accident or the impact of aging. The six ADL's are bathing, dressing, transferring, eating, toileting, and continence. Persons needing help performing these ADL's are further classified as requiring "hands-on assistance" or "standby assistance".

Full Definition
Alternate Care Benefit

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.

Full Definition
Alzheimer's Disease

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.

Full Definition

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.

Full Definition
Assisted Living Facility

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.

Full Definition

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.

Full Definition
Bed Reservations Benefit

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.

Full Definition

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.

Full Definition
Benefit Period

The benefit period is the minimum period of time a Long-Term Care Insurance policy will pay benefits. Some companies use a benefit period to create a pool of money that can provide benefits well beyond the benefit period. With some companies, you would select a monthly benefit and a benefit period to create the pool. 

Full Definition
Benefit Triggers

These are the common “triggers” or items in tax-qualified Long-Term Care policies which a policyholder must need help and assistance with in order to receive benefits. Generally, these include bathing, dressing, toileting, eating, transferring and continence and/or a person requires supervision due to cognitive impairment. With most Long-Term Care Insurance policies, a trigger would be met with either “hands-on” assistance or “standby” assistance

Full Definition
Case Management/Care Management/Care Coordinator

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.

Full Definition
Cash Benefit

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.

Full Definition
Chronic Care

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.

Full Definition
Chronic Illness Rider

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.

Full Definition
Chronically Ill Individual

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.

Full Definition
Claims Offset

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.

Full Definition

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.

Full Definition

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.

Full Definition
Cognitive Impairment

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.

Full Definition
Community-Based Services

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. 

Full Definition
Compound Inflation

A rider on a Long-Term Care Insurance policy where the benefits (daily or monthly benefit and benefits pool) increase by a specific rate compounded every year. Generally, the percentage available in most states is 1% through 5%. This compound inflation rider is available with the purchase of the rider at additional cost. The difference between a compound and simple inflation rider is not significant in earlier years but becomes greater as time goes on. The type of inflation options may determine if a Long-Term Care Insurance policy qualifies for "partnership" certification.

Full Definition
Comprehensive Policy

A Long-Term Care Insurance policy that covers care in multiple settings including facility and in-home care. Most Long-Term Care policies today are comprehensive provide benefits for all levels of home care, skilled, semi-skilled, and homemaker and companionship services, adult day care centers, assisted living facilities, memory care, and nursing home facilities.

Full Definition

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.

Full Definition
Contingent Nonforfeiture

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.

Full Definition
Continuing Care Retirement Community (CCRC)

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.

Full Definition
Convalescent Care Facility

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.

Full Definition
Coordination of Benefits

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.

Full Definition
CPI-Based Inflation

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.

Full Definition

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.

Full Definition
Custodial Care

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.

Full Definition
Daily Benefit

The maximum amount of money a Long-Term Care policy will pay for covered care services each day. Typically, policies will have anywhere from $50.00 per day to maximum levels of $400 a day or more depending on the insurance company and the state of purchase. Many policies offer monthly benefits instead of daily benefits which pay benefits based on bills received in a month instead of a day.

Full Definition
Deficit Reduction Act (DRA)

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.

Full Definition

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.

Full Definition
Durable Medical Equipment

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.

Full Definition
Elimination Period

This is the time, expressed as a number of days, between when an individual qualifies for benefits under a Long-Term Care Insurance policy and starts receiving care and the day they start receiving benefits from the policy. An elimination, or waiting period, is like a "deductible" in a health or auto insurance policy; it's the period of time the policyholder is responsible prior to the insurance company starts paying benefits. 

Full Definition

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.

Full Definition
Future Purchased Option (FPO)

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.

Full Definition
Health Insurance Portability and Accountability Act (HIPAA)

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.

Full Definition
Home Health Aide

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.

Full Definition
Homemaker Service

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

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Hospice Care

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.

Full Definition
Hybrid Long-Term Care Policy

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.

Full Definition

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.

Full Definition
Indemnity Benefit

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.

Full Definition
Inflation Protection

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.


Full Definition
Informal Care

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.

Full Definition
Intermediate Nursing Care

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.

Full Definition
Lapse Protection

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. 

Full Definition
Lifetime Limits

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. 

Full Definition
Limited Payment Options

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. 

Full Definition
Long-Term Care (LTC)

This refers to the type of care that an individual requires due to an illness, accident or the impact of aging that goes beyond 90 days. Care can be provided in a number of settings like one's own home, adult day care centers, assisted living facilities, memory care facilities, and nursing homes. 

Full Definition

The federal government program to provide health insurance for people generally age 65 and over. This is a health insurance program which generally pays a very limited amount of benefits for Long-Term Care. Medicare will only pay for SKILLED CARE. Medicare pays 20 days for skilled services while a “Medicare Supplement” will pay for days 21 to 100 if the individual still requires skilled services. 


Full Definition
Mental and Nervous Disorders

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.


Full Definition
Minimum Asset Allowance

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).

Full Definition

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. 

Full Definition
Partnership Policies

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.

Full Definition
Personal Care

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.

Full Definition
Plan Of Care

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.

Full Definition
Rate Increase

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.


Full Definition
Rate Stability Rules

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.

Full Definition

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.

Full Definition
Respite Care

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.

Full Definition
Return of Premium

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.

Full Definition
Shared Care

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. 

Full Definition
Simple Inflation

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.

Full Definition
Skilled Care

This is the type of care provided by skilled medical personnel, such as registered nurses and professional therapists. This is the highest level of care available outside of a nursing home. The care must be available 24 hours a day and is ordered by a doctor, usually in accordance with a plan of care. 

Full Definition
Spend Down

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.

Full Definition

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. 

Full Definition
Substantial Assistance

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".

Full Definition
Substantial Supervision

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.

Full Definition
Tax-Qualified Policies

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. 

Full Definition

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.)

Full Definition

The process whereby the insurance carrier reviews an individual's health status prior to issuance of a policy in order to determine if they are eligible for coverage. Underwriting for Long-Term Care Insurance generally involves one or more of the following: completion by the applicant of a medical questionnaire, review of applicant's medical records, a telephone interview by a nurse or health aid including a cognitive test, an in-home physical and cognitive assessment by a nurse or health aide.

Full Definition

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