LONG TERM CARE INSURANCE TERMINOLOGY

When considering a long-term care insurance policy, you should be familiar with the following terms and concepts:

BENEFIT CAP:  The maximum benefit amount under a policy.

DAILY/MONTHLY BENEFIT:  The maximum daily or monthly amount your policy will provide toward the cost of long-term care.

ELIMINATION PERIOD:  The waiting period before the benefits are paid (e.g. 90 days).  Opting for a longer waiting period is a good way to lower your premium cost.

EXCLUSIONS:  Certain conditions are listed as exclusions for most policies including, but not limited as policies vary, to alcoholism, drug abuse, some mental illnesses and nervous disorders.  Self-inflicted injury is also usually excluded from coverage.

FREE-LOOK PERIOD:   A 30 day time frame after purchasing insurance, during which you may cancel for a full refund of your premium.

GUARANTEED RENEWABILITY:  Your policy cannot be canceled, and premiums cannot be increased unless all policies of that type within a particular state are increased together.

INFLATION RIDER:  A provision that helps benefits keep pace with the increasing cost of care.

NON-FORFEITURE PROVISION:  If an insurer increases premiums beyond a specific percentage, a policyholder has the option to retain coverage at a reduced level of benefits.

SHARED BENEFITS RIDER:  A provision that allows a couple to share benefits between their policies.  For example, if they each have $ 250,000 of benefits but one partner exhausts his or her entire benefit, that partner can begin drawing on benefits from the other partner's policy.