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Things to Consider when Purchasing a Long Term Care "Health Insurance" Policy - Oakland County, Michigan

Services for Real Estate Pros with Pillar Financial Corporation

Purchasing a Long Term Care Insurance Policy

Should You Consider Purchasing a Long Term Care Insurance Policy?

Yes, You Should Consider It If:

  • You have a significant income and / or assets.
  • You wish to help protect your assets and income.
  • You do not want to rely on the Government or others to pay for your care.
  • You do not want to rely on friends or family to provide you care if needed.

No, You Should Not If:

  • You can not afford to pay the policy premiums.
  • You have a limited amount of assets and / or a very small income.
  • Your only income is Social Security or SSI ( Supplemental Security Income).
  • You have trouble affording the basics, rent, utilities, food, medical needs or medicines

Long Term Care Health Insurance Terms

Accelerated Death Benefit. This is when a consumer can use a feature in their life insurance police allowing them to use some of their policy's benefits before dying.

Activities of Daily/Selected Living (ADLs). A scale that measures disability or the ability to perform functions of daily living. Often three out of six or two out of five activities. ADLs usually include bathing, moving from one location to another, eating, dressing, going to the toilet, and sometimes cognitive ability.

Adult Day Care. Adult day care provides care during the day for adults, usually at senior or community centers to relieve caregivers. It may be purely recreational or may include occupational and physical therapy. Programs may include meals, transportation, health, and related support services.

Area Agencies on Aging (AAA's). A local (city or county) agency, funded under the federal Older Americans Act, that plans and coordinates various social and health service programs for persons 60 years of age or more. The network of AAA offices consists of more than 600 approved agencies. Call your city or county government for the name, address, and telephone number of the AAA in your community.

Assisted Living Facility. This is a place where consumers can live in a residential living environment when they require and receive assistance with their activities of daily living such as individual personal care and health services.

Board and care homes. Are typically privately operated facilities that provide a room, meals, personal care services, and 24-hour protective oversight.

Care management services. A service provided by a professional, typically a nurse or social worker, who arranges, monitors, and coordinates long-term care services, including health and social services, from multiple providers for an extended period of time.

Cash value (Cash surrender value). The amount available in cash to be borrowed against or obtained in cash if a life insurance policy is canceled.

Chronic illness. An illness marked by long duration or frequent reoccurrence such as arthritis, diabetes, heart disease, asthma, and hypertension. These conditions are also considered permanent, sometimes with disabilities, may require rehabilitation instruction, or long period of supervision and care.

Community-based services. Those services that are designed to help older people remain independent and in their own homes; can include senior centers, transportation, delivered meals or congregate meal sites, visiting nurses or home health aides, adult day care, and homemaker services.

Congregate housing. Operated by many different groups, congregate homes offer independent living with some central facilities and services that can include transportation, recreation, social, and health services.

Conditionally renewable. Policies with this provision are no longer sold, but older policies may still be in force. When a policy is conditionally renewable, an insurance company agrees to continue insurance for an individual policyholder as long as it continues to insure everyone in the same state holding the same kind of policy. This is not a guarantee of continued coverage, and policyholders have better protection with a policy that is guaranteed renewable.

Continuing care communities. Offer housing and a range of health care, social, and other services for substantial initial costs plus monthly fees.

Custodial care. Assistance with bathing, dressing, eating, taking medicine, and similar personal needs. Custodial care can be provided by people without medical skills or training.

Daily benefit. This is a certain amount of insurance benefit dollars that consumers can purchase for long-term care insurance expenses.

Elimination period. The period of time before insurance benefits begin. Friendly visitor. Volunteers who visit the homebound to sit and talk or sometimes to run errands and shop for them.

Guaranteed renewable. A policy that is always renewable as long as premiums are paid. A company may raise premiums for all policyholders within a particular group.

Health Insurance Portability and Accountability Act (HIPPA). This is a federal law that became effective on July 1, 1997 that provides consumers certain protection insurance wise when they have pre-existing medical conditions. It also helps long-term care insurance policies to be qualified for some federal tax advantages or benefits.

Home health care. Includes a wide variety of services that bring care to the home: skilled nursing care, physical and occupational therapy, speech therapy, personal care, and the assistance of home health aides (sometimes referred to as homemakers) with chore services.

Homemaker services. This is a trained professional offering interior home services to a consumer who can no longer complete household tasks themselves such as cleaning, preparing meals, or doing laundry.

Inflation protection. This is when a policy has a built in feature where you are provided more benefit money to help pay for the increased costs of long-term care services.

Long-term care insurance. Insurance that pays for medical and personal services for a chronically ill or disabled person; covered services may include nursing home care, home health care, adult care, and respite care.

Lapsed policy. A policy terminated for non-payment of premiums.

Medicaid. A medical insurance program for low-income individuals that is paid by federal and state funds.

Medicare. A federal government health program available to people over 65 and some other citizens meeting specified requirements.

Medigap insurance or Medicare supplement. Medicare supplement insurance, or Medigap (sometimes called MedSup), is private insurance that supplements or fills in many of the gaps in Medicare coverage. While MedSup policies typically cover Medicare's deductibles and co-insurance amounts, they do not pay benefits for long-term care.

National Association of Insurance Commissioners (NAIC). NAIC is a national organization of the 50 state insurance commissioners for exchanging ideas, information, and coordinating regulatory activities. NAIC has no legal power but exerts a strong influence through its recommendations.

Noncancelable policy. A policy that guarantees the premium will remain the same and the policy stay in force as long as the premium is paid.

Non-forfeiture Benefits. It is a policy feature that gives you partial reimbursement of your premiums when you cancel your policy or you are lapsed in paying the premium.

Nursing home - levels of care.

1. Skilled Nursing is for persons who need intensive care, 24-hours-a-day supervision and treatment by a registered nurse, under the direction of a doctor.

2. Intermediate Care is suitable for persons who do not require around-the-clock nursing, but are not able to live alone.

3. Custodial Care is suitable for many persons who do not need skilled nursing care, but require supervision (for example, help with eating or personal hygiene). Insurance companies' definitions may differ somewhat from the above so check the policy.

Older Americans Act. Federal legislation enacted in 1965, and since amended, to set up a network of state and area agencies on aging which plan, coordinate, and fund local programs of services for persons aged 60 or older.

Period of confinement. The time during which you receive care for a covered illness. The period ends when you have been discharged from care for a specified period of time, usually six months.

Personal care. Assistance given people who need help with ADLs such as dressing, bathing, personal hygiene, grooming, or eating.

Rescind. The insurance company cancels a policy.

Respite care. Offers a few hours to several days of help to family members caring for a homebound person. The care may be provided by volunteers, an institution, or an adult care center.

Rider. An amendment to a policy that modifies the policy by expanding or restricting its benefits or excluding certain conditions from coverage.

Skilled nursing care. Daily nursing and rehabilitative care that can be performed only by, or under the supervision of, skilled medical personnel.

Social Services Block Grant. A federal program established under Title XX of the Social Security Act to fund non-medical services for low-income persons.

Spend Down. When individuals deplete their income and assets and thereby meet Medicaid financial eligibility requirements.

Spousal Impoverishment Act. Rules, which allow the at-home spouse of a Medicaid-eligible nursing home resident to keep a minimum of joint income and assets as, determined by the state.

State Health Insurance Program. Usually you see the acronym of SHIP for this word. It is a federally funded program that trains volunteers to help provide health insurance counseling to senior citizens.

Tax-Qualified Long-Term Care Insurance Policy. This is a long-term care insurance policy that conforms to the federal laws and provides some positive federal tax advantages.

Term life insurance. Insurance protection that pays death benefits to survivors but no cash value buildup.

Third Party Notice. This is when a third person such as a relative, friend, lawyer, or accountant is notified when a relative's, friend's, or client's insurance policy is about to stop due to the lack of premium non-payment.

Underwriting. Classifying applicants for insurance according to their degrees of insurability so that the appropriate premium rates may be charged.

Universal life insurance. A flexible premium life insurance policy under which the policyholder may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates that may change from time to time.

Waiver of premium clause. A policy provision that continues the policy without premium payment while the subscriber is ill or disabled. Whole life insurance. A cash value life insurance policy that provides level protection for a level premium as long as premiums are paid and includes a savings feature.

Viatical settlement. A transaction in which a life insurance policyholder who is terminally ill sells his or her rights to the policy in exchange for immediate payment of a portion of the death benefits.

Contact http://www.pillarmortgage.com/ to find out more about putting together long-term care provisions to best meet your particular needs.



Servicing:  Oakland County, Addison Township, Auburn Hills, Berkley, Beverly Hills, Bingham Farms, Birmingham, Bloomfield Township, Clawson, Commerce Township, Farmington, Farmington Hills, Ferndale, Franklin, Hazel Park, Highland Township, Holly, Holly Township, Huntington Woods, Independence Township, Keego Harbor, Lathrup Village, Lyon Township, Madison Heights, Milford, Milford Township, Northville, Novi, Oak Park, Oakland Township, Orchard Lake, Orion Township, Oxford Township, Pleasant Ridge, Pontiac, Rochester, Rochester Hills, Royal Oak,
Southfield, South Lyon, Troy, Walled Lake, Waterford Township, West Bloomfield Township, White Lake Township, Wixom


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