The National Association of Insurance Commissioners (NAIC) has written this guide to help you understand long-term care and the insurance options that can help you pay for long-term care services. The decision to buy long-term care insurance is very important and one you shouldn’t make in a hurry. In most states, state law requires insurance companies or agents to give you this guide to help you better understand long-term care insurance and decide which, if any, policy to buy. Some states produce their own guide.

Take a moment to look at the table of contents and you’ll see the questions this guide answers and the information that is in it. Then, read the guide carefully. If you see a term you don’t understand, look in the glossary starting on page 35. (Terms in bold in the text are in the glossary.) Take your time. Decide if buying a policy might be right for you.

If you decide to shop for a long-term care insurance policy, start by getting information about the long-term care services and facilities you might use and how much they charge. Use the first worksheet that starts on page 40 to write down this information. Then, as you shop for a policy, use Worksheet 2, starting on page 42.

There you can write down the information you collect to compare policies and buy the one that best meets your needs.

If you have questions, call your state insurance department or the insurance counseling program in your state. The telephone numbers are listed starting on page 54 of this guide.

What Is Long-Term Care?

Someone with a prolonged physical illness, a disability, or a cognitive impairment (such as Alzheimer’s disease) often needs long-term care. Many different services help people with chronic conditions overcome limitations that keep them from being independent.

Long-term care is different from traditional medical care. Long-term care helps one live as he or she is now; it may not help to improve or correct medical problems. Long-term care services may include help with activities of daily living, home health care, respite care, hospice care, adult day care, care in a nursing home, and care in an assisted living facility. Long-term care may also include care management services, which will evaluate your needs and coordinate and monitor the delivery of long-term care services.

Someone with a physical illness or disability often needs hands-on or stand-by assistance with activities of daily living (see page 18). People with cognitive impairments usually need supervision, protection, or verbal reminders to do everyday activities.

The way long-term care services are provided is changing. Skilled care and personal care are still the terms used most often to describe long-term care and the type or level of care you may need. People usually need skilled care for medical conditions that require care by medical personnel such as registered nurses or professional therapists.

This care is usually needed 24 hours a day, a physician must order it, and the care must follow a plan. Individuals usually get skilled care in a nursing home but may also receive it in other places. For example, you might get skilled care in your home with help from visiting nurses or therapists. Examples of skilled care including physical therapy, caring for a wound, or supervising the administration of intravenous medication.

Download A Shopper’s Guide to Long-Term Care Insurance, 2006 Edition

PDF format, 860KB, 68Pages.

Table of Contents:

About This Shopper’s Guide 2
What Is Long-Term Care? 3
How Much Does Long-Term Care Cost? 4
Who Pays For Long-Term Care? 4
Individual Personal Resources 4
Medicare and Medicare Supplement
Insurance 5
Medicare Supplemental Insurance 5
Medicaid 5
Long-Term Care Insurance 6
Who May Need Long-Term Care? 6
Do You Need Long-Term Care Insurance? 7
How Can You Buy Long-Term
Care Insurance? 8
Individual Policies 9
Policies From Your Employer 9
Federal Government 9
State Government 10
Association Policies 10
Policies Sponsored by Continuing Care
Retirement Communities 10
Life Insurance Policies 10
Other Options 11
What Types of Policies Can I Buy? 11
How Do Long-Term Care Insurance
Policies Work? 14
How Benefits Are Paid 14
Pooled Benefits and Joint Policies 14
What Services Are Covered 15
Where Services Are Covered 16
What is Not Covered (Exclusions and Limitations) 16
How Much Coverage You Will Have 17
When You Are Eligible for Benefits
(Benefit Triggers) 18
Types of Benefit Triggers 18
When Benefits Start (Elimination Period) 19
What Happens When Long-Term Care Costs
Rise (Inflation Protection)? 20
Additional Benefits 22
Other Long-Term Care Insurance Policy
Options You Might Choose 23
What Happens If You Can’t Afford the
Premiums Anymore? 23
Will Your Health Affect Your Ability to
Buy a Policy? 25
What Happens If You Have Pre-Existing
Conditions? 25
Can You Renew Your Long-Term Care
Insurance Policy? 26
How Much Do Long-Term Care Insurance
Policies Cost? 26
What Options Do I Have To Pay The
Premiums On The Policy? 28
If You Already Own a Policy, Should You
Switch Plans or Upgrade the Coverage You
Have Now 29
What Shopping Tips Should You Keep in
Mind? 29
References 34
Glossary 35
Worksheet 1: Information About the
Availability and Cost of Long-Term
Care in Your Area 40
Worksheet 2: How to Compare
Long-Term Care Insurance Policies 42
Worksheet 3: Facts About Your
Long-Term Care Insurance Policy 47
Worksheet 4: Long-Term Care Riders
To Life Insurance Policies 49
Personal Worksheet 51
List of State Insurance Departments,
Agencies on Aging and State Health
Insurance Assistance Programs 54

About the NAIC …

The National Association of Insurance Commissioners (NAIC) is the oldest association of state government officials. Its members consist of the chief insurance regulators in all 50 states, the District of Columbia and five U.S. territories. The primary responsibility of the state regulators is to protect the interests of insurance consumers, and the NAIC helps regulators fulfill that obligation in a number of different ways. This guide is one example of work done by the NAIC to assist states in educating and protecting consumers.

Another way the NAIC lends support to state regulators is by providing a forum for the development of uniform public policy when uniformity is appropriate. It does this through a series of model laws, regulations and guidelines, developed for the states’ use. States that choose to do so may adopt the models intact or modify them to meet the needs of their marketplace and consumers. As you read through this guide, you will find several references to such NAIC model laws or regulations related to longterm care insurance. You may check with your state insurance department to find out if these NAIC models have been enacted in your state.

National Association of Insurance Commissioners
2301 McGee Street
Suite 800
Kansas City, MO 64108-2604
(816)-842-3600
Fax 816-783-8175
www.naic.org

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