I have to remind myself when I'm talking to clients that they might not readily understand the LTC lingo I use. Learning a glossary of words found in standard policies is beneficial.
Here are a few:
- Lifetime Maximum Benefit: Also called a "Policy Limit". Refers to the amount of maximum dollars that will be payable over the life of a policy.
- Monthly or Daily Maximum: Maximum dollar amount a policy will pay each day/each month. Policies that calculate benefits on a monthly basis provide the richest return on investment.
- Elimination Period: Generally speaking, this is amount of days you pay for your own care before your policy begins to pay you benefits. There are exceptions, and the elimination period may be adjusted according to your preference with most policies.
- Cash Benefit: Some policies pay a cash benefit, which is a partial amount of the Maximum Daily/Monthly benefit. It can be used to pay for care rendered by a family member or non-skilled person. It is not determined by submitting bills.
- Reimbursement Benefit: Pays you back for expenses incurred up to a predetermined monthly/daily benefit--but not more than the predetermined monthly/daily benefit.
- Facility Care: Care received in a nursing home, assisted living center. or Alzheimer's Care unit.
- Home or Community Care: Generally, this is care received at home or an adult day care.
- Waiver of Premium: Generally, a provision whereby premiums cease when care begins.
- Care Coordinator: Usually a licensed professional who is available to access your needs and help you and your family arrange for long term care services.
- Inflation protection: For additional cost (premium), inflation protection can be purchased to make your monthly/daily benefits grow each year. This in turn, makes the lifetime maximum benefit grow as well. Typical types of inflation include options such as simple and compounded increases from 1% to 5% per year.
- Return of Premium: This is an expensive optional rider (additional add-on) which offers some form of reimbursement of premiums upon death. The benefit is generally limited to a certain age, and usually is calculated reducing the payout by any claims that have been paid by the insurance company.
- Respite Care: A benefit which provides your family member or volunteer caregiver the opportunity to "take a break" from your care. Care giving can be terribly stressful. Your policy with this option would pay for your care temporarily in an assisted living center or nursing home. Typically, this is 20-30 days per year, not to exceed the monthly/daily maximum for that time period.
- International Benefit: Some policies allow for long term care to be paid for outside the United States on a limited basis until you can return home.
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