Long Term Care Insurance Glossary
When investigating long Term Care Insurance there will be some concepts and terms you should be familiar with. You always want to guard against allowing sales men to speak to you in industry jargon that you do not fully comprehend.
Here are some basic definitions you want to know.
Alien Insurer
This type of insurance company is one that is located in a country, other than the one you live in.
Bad Faith
This is an instance in which an insurance company, has acted in a manner, or taken action relative to your policy or benefits, that is not in keeping with the mutual understanding of the agreement you had.
Binder
This is a temporary policy, or contract, for insurance coverage. It is implemented when it is not practical to issue a full permanent policy. Often this will happen when you first take out a policy. Upon giving the insurance agent a check, they will immediately issue a “binder”, so you will be covered right away.
Cancellation
This action is carried out by either the insurance company, or by the insured effectively ending the policy and effectively terminating coverage.
Claims Adjuster
This will be the person assigned to settle a claim that a policy holder makes. Often they are independent contractors hired by the insurer to come out and personally report on the situation. For example if you were placed in a nursing home, the adjustor may visit and speak with the administrators.
Consideration
This is the action of the policy holder making statements regarding their condition and the insurance company taking those comments into account and issuing the policy, and coverage.
Declination
This is the opposite of consideration where an insurer will refuse to issue a policy based upon statements made by the applicant.
Domestic
This is the term for an insurance company that does business in the state they are incorporated in.
Free Look Period
This is an amount of time, generally 30 days, in which a person has the opportunity of changing their mind and not purchasing an insurance policy they have paid for.
Independent Agent
This is an insurance salesman that is not directly employed by an insurance company, but sells products from a variety of companies on a commission basis.
Lapsed Policy
This is a policy that is no longer in effect due to non-payment.
Maximum Life Time Benefit
This is the total amount of benefit you could be paid under one policy, for the entire life of that policy.
Policy Term
This is the defined length of time the policy will be in effect. For example a 20 year term policy would have a length of term of 20 years.
Rider
This is an added feature, that you pay an additional fee for, that is added onto your coverage. For example, you could add a rider for coverage for your spouse, under your policy for an additional fee.
Severe Cognitive Impairment
This is the loss of the ability to understand ones surrounding. It is judged by the individuals ability to correctly understand time, place and person.
Tax Qualified Policies
With this type of policy the holder is able to deduct the premiums paid, from their gross income as it relates to their taxes.
Waiting Period
This is the amount of time a person would need to wait in order to be placed in a skilled care facility