Long-term care insurance is a type of insurance policy designed to cover the costs associated with long-term care services, which are typically not covered by health insurance, Medicare, or Medicaid. These services may include assistance with activities of daily living (ADLs) such as bathing, dressing, and eating, as well as services provided in nursing homes, assisted living facilities, or at home.
ADLs refer to basic self-care tasks that individuals typically perform daily, including bathing, dressing, eating, toileting, transferring (such as moving from a bed to a chair), and maintaining continence. The need for assistance with these activities is often a determining factor in eligibility for long-term care services and benefits.
Benefit triggers are the conditions or criteria that must be met for an individual to qualify for benefits under a long-term care insurance policy. These triggers often include the inability to perform a certain number of ADLs independently or the need for substantial assistance due to cognitive impairment.
The elimination period, also known as the waiting period or deductible period, is the length of time that must pass after the onset of a covered condition before benefits from a long-term care insurance policy become payable. Policyholders are responsible for covering the costs of care during this period before the insurance benefits kick in.
The daily benefit amount is the maximum amount of money that a long-term care insurance policy will pay for covered services on a daily basis. Policyholders can choose the daily benefit amount when purchasing the policy, and it may vary depending on the level of coverage selected.
Inflation protection is an optional feature of long-term care insurance policies that helps adjust the benefit amount over time to keep pace with the rising cost of long-term care services. Common forms of inflation protection include automatic compound inflation protection and guaranteed purchase options.
Care coordination refers to the process of organizing and managing the delivery of long-term care services to ensure that individuals receive appropriate and comprehensive care. Some long-term care insurance policies offer care coordination services to help policyholders navigate the healthcare system and access the services they need.
Respite care provides temporary relief to primary caregivers by offering short-term, temporary care for individuals who require assistance with daily activities due to illness, disability, or age-related conditions. Some long-term care insurance policies may cover respite care services as part of their benefits.
Home health care services involve medical and non-medical care provided in the individual’s home to help them maintain independence and quality of life. These services may include nursing care, physical therapy, occupational therapy, and assistance with activities of daily living. Some long-term care insurance policies cover home health care as an alternative to institutional care.
Premiums are the periodic payments that policyholders make to maintain their long-term care insurance coverage. Premium amounts are based on factors such as the policyholder’s age, health status, desired coverage level, and the features of the insurance policy.