CARD T267
Long-Term Care Insurance
Coverage for qualifying ongoing care needs under policy terms. Benefits may support help at home or in a facility.
How it works
LTC insurance addresses qualifying ongoing assistance that ordinary medical insurance may not cover. Compare benefit triggers, covered settings, daily or monthly limits, the benefit pool, elimination periods, exclusions, inflation options, and renewability. Reimbursement policies pay eligible expenses up to limits; indemnity or cash designs pay under different terms. Meeting a trigger does not remove every other condition. [21] [22] [23]
A policy with a $200 daily reimbursement limit pays $160 for an eligible $160 expense, not automatically $200.
LTC insurance is not the same as acute medical coverage or disability wage replacement.
CARD T268
Activities of Daily Living (ADLs)
Basic personal tasks used to assess functional ability. Common examples are bathing, dressing, eating, toileting, transferring, and continence.
How it works
The six activities of daily living (ADLs) commonly used for tax-qualified long-term care insurance are bathing, dressing, eating, toileting, transferring, and continence. Transferring means moving into or out of a bed or chair. Continence concerns controlling bladder and bowel functions or managing related hygiene needs when control is lost. These are basic personal-care tasks. Shopping, cooking, cleaning, and managing money are separate tasks called instrumental activities. Benefit eligibility depends on the required level of help, not merely finding a task inconvenient. [21] [22] [23]
An insured who needs substantial help bathing and dressing has limitations in two listed ADLs; inability to shop alone is a different type of limitation.
Eating means feeding oneself, not buying groceries or preparing meals.
CARD T269
Cognitive Impairment
A decline in mental abilities such as memory, judgment, or orientation. Severe impairment may qualify for long-term care benefits under policy requirements.
How it works
Severe cognitive impairment can involve loss of memory, orientation, reasoning, or judgment that creates a need for substantial supervision to protect health and safety. In tax-qualified LTC, this can be an alternative to the physical ADL route. A diagnosis alone does not automatically satisfy every contractual and certification requirement, and ordinary occasional forgetfulness is not the same as severe impairment. [21] [22] [23]
A person can walk, eat, and dress but wanders unsafely because of severe dementia and needs substantial supervision.
The cognitive route does not require adding two physical ADL failures.
CARD T270
Benefit Trigger
A condition that must be met to qualify for benefits. An LTC policy may use functional impairment or severe cognitive impairment.
How it works
A benefit trigger establishes qualifying need; an elimination period establishes when benefits can begin. For tax-qualified LTC, a licensed health care practitioner generally certifies inability to perform at least two ADLs without substantial assistance for an expected period of at least 90 days, or severe cognitive impairment requiring substantial supervision. Care must follow a prescribed plan. The 90-day expected-duration test is not automatically a 90-day policy waiting period. [21] [22] [23]
A policy can have a 30-day elimination period while the functional limitation is expected to last at least 90 days. These are different requirements.
Do not confuse expected duration of impairment with days required before payment.
APPLY THE TERMS
Practice questions
Select an answer, then check it to see why each option is right or wrong.
T267 · Long-Term Care Insurance
0 of 3 answered
T268 · Activities of Daily Living (ADLs)
0 of 3 answered
T269 · Cognitive Impairment
0 of 3 answered
T270 · Benefit Trigger
0 of 3 answered
Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.