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Long Term Care Policy Features and Options |
| Alternative Plan of Care - Allows the policy holder to receive benefits for care or services not specifically defined within a policy. |
Bed Reservation - Reserves a patient's bed in a nursing home or assisted living facility if the patient needs to leave the facility for temporary hospitalization or go home for a holiday. |
| Benefit Period - The lifetime value of a policy. |
Daily Benefit - The amount of insurance benefit in dollars a person chooses to buy for long-term care expenses. |
| Elimination Period - A type of deductible; the length of time the individual must pay for covered services before the insurance company will begin to make payments. |
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. |
| Nonforfeiture Benefits - A policy feature that returns at least part of the premium to you if you cancel your policy or let it lapse. |
Restoration of Benefits - When benefits under a policy are paid, and the maximum lifetime benefit is restored to its original maximum if the policy holder does not require care for a designated period of time. |
| Spousal Discount - A discount given when both spouses apply for coverage with the same company. |
Third Party Notice - A benefit that lets you name someone who the insurance company would notify if your coverage is about to end due to lack of premium payment. This can be a relative, friend, or professional such as a lawyer or accountant, for example. |
| Waiver of Premium - When the premium does not have to be paid while receiving benefits |
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| Tax Qualified vs Non Tax Qualified*
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| Tax-Qualified Policies
| Non-Tax Qualified |
| 1. Premiums can be included with other annual uncompensated medical expenses for deductions from your income in excess of 7.5% of adjusted gross income up to a maximum amount adjusted for inflation. |
1. You can't deduct any part of your annual premiums. |
| 2. Benefits that you may recieve will not be counted as income. |
2. Benefits that you may receive may or may not count as income. The US Department of the Treasury has not yet ruled on this issue. |
| 3. Benefit triggers may be more restrictive than those which may be allowed in non tax-qualified policies. The federal law requires you be unable to do 2 of 5 out of 6 possible ADLs without substantial assistance. |
3. Policies can offer a different combination of benefit triggers. Benefit triggers may not be restricted to 2 of 6 ADLs |
| 4. "Medical necessity" can't be used as a trigger for benefits. |
4. "Medical necessity" and / or other measures of disability can be offered as benefit triggers. |
| 5. Disability must be expected to last for at least 90 days. |
5. Policies don't have to require that the disability be expected to last 90 days. |
| 6. For cognitive impairment to be covered, a person must require "substantial supervision." |
6. Policies don't have to require "substantial supervision" to trigger benefits for cognitive impairments. |
| * A Shopper's Guide to Long-Term Care Insurance, National Association of Insurance Commissioners. |
