Suze Orman's Insurance Evaluator

A B C D E F G H I J L M N O P Q R S T U V W Y

A

ACCIDENT: An unintended occurrence outside the normal course of events, which causes illness, injury or damage to a person or property.
ACCIDENTAL AIR BAG DEPLOYMENT COVERAGE: Several insurance companies offer coverage for the accidental deployment of an air bag. Generally, the coverage provided will be up to $2,500 for the reinstalling of a factory installed air bag when it deploys not as a result of a comprehensive or collision loss. This coverage is inexpensive and is available only to vehicles that are covered for comprehensive and collision.
ACTUAL CASH VALUE: The basis for an insurance claim payout when your car is damaged. The payout is based on the depreciated value of the car. Its make, model, age, mileage and condition before the accident will determine its actual cash value.
ACTUAL CASH VALUE: A policy that covers your house or personal property for its depreciated value. If you suffer a loss, your insurance claim payout will be based on the current depreciated value, regardless of what it actually costs to go out and replace the property/possession today. Actual Cash Value is not recommended; it can leave you with large out of pocket costs if you want to replace lost or damaged possessions with new items.
AD & D (ACCIDENTAL DEATH AND DISMEMBERMENT) INSURANCE: An AD & D or accidental death and dismemberment policy pays benefit in the event of accidental death or injury. This policy does not pay a benefit in the event of death due to sickness.
ADDITIONAL LIVING EXPENSE COVERAGE OR LIMIT: If damage to your residence requires you to move out while it's being repaired, this coverage will pay for all necessary living expenses (hotel, meals, laundry, etc.) up to a specified amount or time limit, depending on the individual policy purchased. Some policies offer unlimited coverage, allowing the actual amount needed, without a time limitation.
ADDITIONAL LIVING EXPENSE LIMIT: If damage to your residence requires you to move out while it's being repaired, this coverage will pay for all necessary living expenses (hotel, meals, laundry, etc.) up to a specified amount or time limit, depending on the individual policy purchased. Some policies offer unlimited coverage, allowing the actual amount needed, without a time limitation.
ADLS: An abbreviation for the Activities of Daily Living such as, bathing, eating, dressing, transferring (in and out of bed, chairs and the like, unattended), going to the bathroom and maintaining continence. Typically your Long-Term Care insurance benefits become available to you when you are expected to be unable to perform at least two of these ADLs by yourself for at least 90 days. It's important to ask your insurance agent how each of the ADLs is defined in your policy.
ADULT DAY CARE: Provides social and health-related services during the day in a community setting.
ALL RISK: The broadest form of coverage available, providing protection against all risks of physical loss or damage from any external cause. The term "all risk" means there is coverage for all perils except those specifically excluded.
ALZHEIMER'S DISEASE (AD): A form of dementia that affects memory and deteriorates intellectual capacity. To qualify for long-term care insurance benefits, this condition will require substantial and continuous supervision to protect patient and others.
ANNUAL RENEWABLE TERM (ART): This type of term insurance is renewable at the end of each year, however, the premium increases to reflect your new age. If your need for insurance is for a short duration (up to 3 years), you should consider an annual renewable term. If you want insurance for a longer period, a Level Term policy is advisable; your premiums will not increase as you age.
APPRAISAL: A written analysis of the estimated value of an item or property prepared by a qualified appraiser. Often, if you is buying special coverage for jewelry, fine arts, collections and such, an appraisal of the items to be covered will be requested. Even if an insurance company doesn't require one, it's recommended that an appraisal be obtained on expensive items. Having a full description of an item with a value assigned will make it much easier to receive a fair and prompt payment in the event it is damaged or stolen. Another reason appraisals are recommended is because, during the appraisal process, the item being appraised is closely examined by the appraiser. This is beneficial, especially in terms of jewelry. During the appraisal process, it can uncover if a stone setting is secure, if prongs need tightening or if clasps are secure and working properly.
APPRAISER: A person qualified by education, training, and experience to estimate the value of real property and personal property.
ASSETS: The financial and and personal property a person has available. Assets may be liquid (cash and all other assets that can be converted to cash relatively quickly. Assets may also be non-liquid (an asset such as a house that is not easily turned into cash).
ASSETS: Generally assets are the real and personal property a person has available. Assets may be liquid (cash and all other assets that can be converted to cash relatively quickly. Liquid assets can include money in savings and checking accounts, money-market accounts, and most CD's). Assets may also be non-liquid (an asset such as a house that is not easily turned into cash).
ASSIGNMENT: A policy owner of the policy has the right to assign their policy. For example, you borrow money from a bank and this bank wants you to assign your life insurance policy to them as collateral for a loan. Thus, in the event of your premature death the bank will be paid the remaining loan balance from the proceeds of your insurance policy.
ASSISTED LIVING FACILITY (ALF): Also called an Alternate Care Facility (or a Residential Care Facility in California), this type of facility provides supervision and assistance to the residents with needs resulting from not being able to perform the activities of daily living (ADLs) or from severe cognitive impairment. Meals are provided to the residents and overall charges can vary by how much assistance is needed by the resident, with dementia/Alzheimer's patients typically costing the most. Medicare and Medicaid typically do not cover the cost of room and board in an assisted living facility but most LTCI policies do cover it.
ASSISTED LIVING FACILITY/RESIDENTIAL CARE FACILITY: This type of facility provides supervision and assistance to the residents with needs resulting from not being able to perform the activities of daily living (ADLs) or from severe cognitive impairment. Meals are provided to the residents and charge can vary by how much assistance is needed by the resident. Medicare and Medicaid typically do not cover the cost of room and board in an assisted living facility but most LTCI policies do cover it.

B

BED RESERVATION: If you need to be temporarily away from a nursing home or assisted living/ residential care facility (RCF), this benefit will pay to keep a bed reserved for you. So, when you come back to the facility, you don't have to wait for a bed to become available. Generally insurance companies will pay 21 to 30 days per calendar year.
BENEFICIARY: The person you name to receive the proceeds from your policy in the event of your death. You should name a primary and a secondary (contingent) beneficiary. This way, if something were to happen to the primary beneficiary, the proceeds will go to the secondary (contingent) beneficiary.
BENEFIT AMOUNT: The monthly payout from the insurer in the event of a disability.
BENEFIT PERIOD: The duration of time in which the policy will pay for your long-term care expenses; e.g. 1, 2, 3, 4, 5, 6, 7, 10 years. Unlimited benefit periods are available with most companies, although claims experience has shown that a four-year benefit period will pay the full duration of expected care for 85% of people who use their policy. Typically, people with a family history of Alzheimer’s consider longer benefit periods. Some newer policies offer a Cash Benefit Account instead of a benefit period such as $100,000, $200,000, $300,000, $500,000 or $1,000,000 which is paid out at a monthly amount that you choose.
BENEFIT TRIGGERS (HOW TO GET A CLAIM PAID): If you have a Tax-Qualified (TQ) plan — which represents 99% of the policies sold today — in order to qualify for benefits, you must generally meet one of two conditions, as follows: The first condition is to be expected to perform two or more of six activities of daily living (ADL's) for at least 90 days. In order to function normally, most of us need to be able to (1) feed ourselves; (2) clothe ourselves; (3) transfer ourselves (get in and out of bed, chairs, and the like, unattended); (4) be continent; (5) use the toilet; and (6) bathe ourselves. With a TQ policy, if you got to a point in your life where you could not perform any two of the qualifying ADL’s without substantial assistance and it was expected that you would be that way for at least 90 days, then you would qualify for benefits.

The second condition is severe cognitive impairment, which simply means that you qualify if you develop, say, Alzheimer's disease or cannot think or act clearly and therefore become a danger to yourself or others. Your condtion and level of care needed for either of these two ways to trigger the benefits must be certified to the insurance company by a licensed health care practitioner, who could be a physician, a Registered Nurse or a Licensed Social Worker. This professional will also work with the insurance company to develop a 12 month Plan of Care for you in order for benefits to start. "
BLANKET SCHEDULE: If you have multiple items you want to insure beyond the basic limits of your policy, a single blanket schedule can coverage a wide range of personal belongings. You do not need to provide detailed information for each single item included in the blanket coverage, but it is important to note that some insurance companies will place a "maximum single limit" amount for any one item covered in a blanket schedule.
BODILY INJURY: The bodily injury liability portion of a policy pays damages for bodily injury or death resulting from an accident for which you are at fault.
BODILY INJURY LIABILITY: The portion of your policy that pays damages for bodily injury or death of other people, excluding other members of your family covered by the policy, or living in the same residence.
BUILDING CODE: Local regulations that control design, construction, and materials used in construction. Building codes are based on safety and health standards.
BUILDING ORDINANCE OR LAW/BUILDING CODE COVERAGE: Homeowner insurance coverage protects you if in the process of repairing or rebuilding, you find that current building-code regulations require upgrades that exceed your current policy limits. For example, if your basic home-owner's insurance provides a full payout for the cost of a certain grade of wood, but current building-code regulations require a higher grade of wood, this policy will give you a payout to cover the difference in cost.
BYLAWS: The rules and regulations that a homeowners association or corporation adopts to govern activities.

C

CANCELLATION: You can request for the cancellation of you policy, simply by sending a written letter to the company.
CARE MANAGEMENT/CARE COORDINATION: At the point you need assistance, a Care Manager — usually a Registered Nurse — will work with you, your family, and your doctor to develop a “Plan of Care”, which is necessary as part of the benefit qualification process. A Care Manager wil schedule your services, help complete claims paperwork and update your Plan of Care as needed. Typically the insurance company with pay for costs associated with Care Management, without reducing your benefit.
CAREGIVER TRAINING: A policy benefit that provides for assistance in training and educating unpaid informal or "volunteer" caregivers - such as friends or relatives - on how to provide your care; e.g. how to lift, bathe, feed you, etc.
CASH: This benefit payment method pays you your monthly benefit each month you are eligible to receive benefits, regardless of whether or not you incur charges for care. You do not have to prove services by filing a claim to collect this benefit and you can use the money however you need it; e.g., to pay for informal caregivers such as family, friends, neighbors, sitters, companions, and the like. Typically you or a responsible party, such as your Power of Attorney, will sign a statement each month verifying that you are still benefit eligible; i.e., that you need help with at least two Activities of Daily Living (bathing, dressing, transferring from bed to chair, toileting, continence, or eating) or have a substantial cognitive impairment that makes you a threat to yourself or someone else. The tax treatment is the same as the indemnity payment method.
CASH BENEFIT ACCOUNT: Some newer policies offer a Cash Benefit Account instead of a benefit period such as $100,000, $200,000, $300,000, $500,000 or $1,000,000 which is paid out at a monthly benefit that you choose. For example, a $300,000 Cash Benefit Account paired with a $4500 monthly benefit would pay benefits for 66 months, or 5 1/2 years. Buying inflation coverage will make both the Cash Benefit Account and the monthly benefit grow each year for a certain number of years or possibly for as long as you own your policy.
CC&R'S: Is an agreement, usually included in the deed to a property, restricting the manner in which the property can be used. Developers may record a document called "covenants and conditions and restrictions" (CC&R's) to control the nature and character of a property development for the benefit of future owners. For example, a covenant or condition may require a property owner to maintain the property according to aesthetic guidelines, such as how high a fence can be built or what colors the house can be painted.
CHANGING BENEFICIARY: A policy owner of the policy can change the beneficiary/beneficiaries at any time.
CHANGING OWNER: A policy owner can request the change in ownership at any time.
CO-OP: A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence of title. Essentially a co-op housing community is jointly owned and managed by those who live in it. Each member buys shares in this community, attends regular meetings to discuss maintenance, social events, or other community matters and helps run the co-op. Members can participate in specific committees or be on the co-op board.
COGNITIVE DEMENTIA: This condition affects memory and deteriorates intellectual capacity. To qualify for long-term care insurance benefits, this condition will require substantial and continuous supervision to protect patient and others.
COGNITIVE IMPAIRMENT: This is deterioration in intellectual capacity, which may be caused by Alzheimer's disease, senile dementia or other mental disorders of organic origin. To qualify for long-term care insurance benefits, this condition will require substantial and continuous supervision to protect yourself or others.
COLLISION COVERAGE:: This coverage provides a payout for damage to your car that results from impact with another vehicle or object. This coverage applies regardless of fault. .
COMMON AREAS: Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.
COMMON DISASTER/COMMON ACCIDENT CLAUSE: If your life partner is the primary beneficiary of your policy and you both die in a common accident, proceeds from your policy will end up in your life partner's estate. A Common Disaster/Common Accident Clause in your policy will prevent this situation. Under this provision your partner must survive you by a certain number of days (normally up to 30 days) for them to receive the proceeds. If your life partner does not survive for that duration, then the proceeds of your policy will go to the contingent (secondary) beneficiary.
COMPOUND INFLATION PROTECTION: If you selected 5% compound inflation protection in your policy, your Daily or Monthly Benefit Amount (DBA or MBA) and Personal Benefit Account will grow each year by 5 percent of the previous year's maximum benefits. The younger you are, the more inflation protection you'll need. Some policies offer 3% or 4% compound increases but the 5% compound increases inflation option provides you with the greatest level of benefit growth as your benefit will double every 15 years. For a significantly lower premium, some companies offers 5% compound 2X inflation option which means your benefits will double in 15 years then stop growing. This can be a cost-effective inflation option if you bump up your initial benefit by at least 30% more than the current cost of care. Other compound options may be offered such as 5% compound 3X or 4X which means your initial benefit will triple or quadruple then stop growing. These options are good for older applicants. If you choose lower compound options such as 3% or 4%, it is wise to also bump up your initial benefit as it will take 24 years for your initial benefit to double with 3% compound and 18 years for it to double with 4% compound.
COMPREHENSIVE COVERAGE: This coverage provides a payout for non-collision damage to a car, such as fire, flood, riots, vandalism, contact with animals etc. Generally, comprehensive claims do not increase an insured's premium.
CONDOMINIUM: This is a real estate project in which each unit owner has title to a unit in a building. A condominium is a type of dwelling where the structure is owned jointly while spaces within the structure are owned individually. Special property and liability forms cover the interests of the condominium association and of unit owners.
CONVERSION PRIVILEGE: Most term policies offer a conversion privilege. This feature allows you to convert your term policy to a permanent policy within a certain time, without having to take a medical exam. If you have a continuing need but due to change in health are uninsurable, this option will allow you to convert your term policy to a permanent policy. Conversion is done at the attained age, meaning your converted policy's premium is based on the age at the time of conversion. The conversion period varies by the company. You should consider buying a policy that allows you the longer conversion period.
COST OF LIVING ADJUSTMENT (COLA): This rider provides protection against inflation. This rider increases the disability benefit amount by the percentage selected after one full year of disability and each year thereafter for the duration of the disability.
COVERAGE OF PRE-EXISTING CONDITION: If you have a health condition at the time of your LTCI policy application, you must disclose it to the insurance company. If the insurer agrees to issue a policy to you, you will have coverage for the pre-existing condition, subject to the policy's exclusions; e.g. some policies exclude any care related to alcohol or substance abuse or nervous/mental disorders.
CUSTODIAL CARE: Assistance with activities of daily living (ADLs) such as eating, bathing, dressing, transferring, toileting and continence are examples of custodial care which is also called non-skilled care or chronic, maintenance care.

D

DAILY BENEFIT AMOUNT: The daily benefit amount is the maximum amount per day that will be available to reimburse you for covered care expenses, like home care, adult day care, hospice, assisted living, or nursing home care. Some policies provide a monthly rather than daily benefit.
DAMAGES: A sum of money that one party is legally obligated to pay to another as compensation for injury or other loss.
DAMAGES: A sum of money that one party is legally obligated to pay to another as compensation for injury or other loss.
DECLARATIONS OR DECLARATION PAGE: The section of an insurance policy that provides detailed information, such as the name and address of the insured, the vehicles insured, the policy period, the amount of insurance coverage and applicable premiums.
DECLARATIONS OR DECLARATION PAGE: The section of an insurance policy that provides detailed information about the insured, such as the name and address, the property you, its location and description, the policy period, the amount of insurance coverage and applicable premiums.
DECREASING TERM: This policy starts with a specific death benefit, which then decreases each year until your policy expires at zero. Your premiums remain level for the whole duration even though your coverage is decreasing each year.
DEDUCTIBLE: An amount that the insured (policyholder) has agreed to pay on each claim.
DEDUCTIBLE: An amount that the you (the policyholder) has agreed to pay on each claim. This is your out-of-pocket cost before your insurance policy will kick in and make a payout for a claim.
DEFINITION OF TOTAL DISABILITY: This will determine under what circumstances the company will pay the disability benefit. If you have an "any occupation" disability policy, it will pay you only if you cannot perform in any occupation. If the definition of disability in your policy were "own occupation," it would pay as long as you perform the duties of your own occupation.
DEPRECIATION: The decline in a car's value over time. The value of a car decreases over time due to wear and tear. The minute you drive a new car off the lot it will depreciate 15 percent to 20 percent. Each year you own your car its value will continue to depreciate. .
DEPRECIATION: The current value of a piece of personal property, based on wear and tear. For example, a three-year-old sofa is not worth as much as a new sofa. The current value of the three-year old sofa is its depreciated value. Any insurance policy that provides Actual Cash Value coverage uses the depreciated value to calculate its payout. This is not the right coverage to have. Replacement Cost coverage will give you a better payout: your coverage is based on what it would cost you to purchase a replacement item at today's market price, rather than its depreciated value .
DETACHED STRUCTURES: Beyond your primary home, the other “structures” on the property including things such as a detached garage, pool, or extensive fencing.
DISABILITY INCOME INSURANCE: Disability Income Insurance is designed to replace a portion of your lost income in the event you are injured or sick and cannot work or are required to work at a reduced level so you can pay your bills. It does not provide the additional funds needed to pay for long-term care, which could be several thousand dollars a month. Finally, most disability income insurance policies end at age 65
DISABILITY PREMIUM WAIVER: If an insured were to become disabled (generally 6 months) then the future premiums are waived for the duration of the disability. Also, any premium paid during the 6 months will be refunded. Each company has a different stipulation of how a person would qualify for this rider.
DOUBLE INDEMNITY: Many life insurance policies pay double the death benefit if the death of the insured is accidental. For instance, if your death happened because of a car accident, and you had this feature on a $200,000 policy, it would pay out a $400,000 death benefit. Medical emergencies, such as heart attacks, do not count. It should be noted, however, that this benefit is paid very infrequently. The odds are very low that any of us will die in an accident. And if you were to be in a serious accident, but didn't die from your injuries within 90 days, most policies with this feature will not pay the double indemnity benefit. This benefit is largely a scare tactic, and not worth the cost.
DWELLING: The structure of the home is simply referred to as the Dwelling. Homeowners insurance provides property insurance protection against damage or loss to the home structure or an attached structure.
DWELLING COVERAGE OR LIMIT: The dwelling coverage in a condo owners policy is designed to provide coverage for the additions, alterations, fixtures, improvements or installations that the unit owner makes to the condo unit (the residence premises). For example, if the owner of the condo unit or a previous owner installed built-in appliances, wall-to-wall carpeting, upgraded kitchen cabinets, etc., they would be covered in the dwelling coverage. The dwelling coverage provides protection against fire, theft, wind and other perils. Coverage for most natural disasters is excluded. The dwelling coverage sometimes called "coverage A".
DWELLING COVERAGE OR LIMIT: A section of a home-owner’s insurance policy that covers a house and attached structures against fire, theft, wind, and other perils. Coverage for most natural disasters is excluded. Imagine a house on moving day...empty, waiting to be filled. This is the part referred to as the dwelling coverage sometimes called “coverage A.” It is the physical home (rooms, fireplaces, tile floors, carpeting, etc.) and the structures attached to it, such as an attached garage.
DWELLING LIMIT: A condo is different from a single-family home in that all the condo owners share responsibility for the upkeep and insurance of certain "common areas." Depending on your condo association's rules-what's called the bylaws-you may be responsible for structural damage that occurs within your unit. Please make sure you understand what your condo association's master policy covers, and what you will need to cover through your own personal condo insurance policy. Your Dwelling Limit amount should be based, in part, on your need to insure or not insure the interior structure of your condo unit. Your insurance agent can help you evaluate the association's master policy.
DWELLING LIMIT (OR COVERAGE A): A condo is different from a single-family home in that all the condo owners share responsibility for the upkeep and insurance of certain "common areas." Depending on your condo association's rules-what's called the bylaws-you may be responsible for structural damage that occurs within your unit. Please make sure you understand what your condo association's master policy covers, and what you will need to cover through your own personal condo insurance policy. Your Dwelling Limit amount should be based, in part, on your need to insure or not insure the interior structure of your condo unit. Your insurance agent can help you evaluate the association's master policy.
DWELLING LIMIT (OR COVERAGE A): A co-op is different from a single-family home in that all the co-op owners share responsibility for the upkeep and insurance of certain "common areas." Depending on your co-op association's rules-what's called the bylaws-you may be responsible for structural damage that occurs within your unit. Please make sure you understand what your co-op association's master policy covers, and what you will need to cover through your own personal co-op insurance policy. Your Dwelling Limit amount should be based, in part, on your need to insure or not insure the interior structure of your co-op unit. Your insurance agent can help you evaluate the association's master policy.
DWELLING LIMIT TYPE: Insurance companies provide coverage for your dwelling either through “Replacement Coverage” or “Actual Cash Value Coverage.” Within the Replacement Cost Coverage provisions, there are three types: Replacement Cost, Extended Replacement Cost and Guaranteed Replacement Cost. There is only one type of Actual Cash Value Coverage.

E

EARTHQUAKE INSURANCE: This endorsement or policy will cover loss to the dwelling and contents caused by an earthquake, tremors or aftershock. Earthquake coverage carries its own deductible. Earthquake insurance most often can be purchased from the homeowners insurance company. This coverage is often added as an endorsement to the homeowners policy and an additional premium is charged. Other times this coverage is purchased as a separate policy. In some states, earthquake insurance can be purchased from an independent insurance company. In California, there is a state-run insurance pool, the California Earthquake Authority (CEA), which sells most policies.
ELIMINATION PERIOD (LTCI): The waiting period before covered benefits are payable. During an Elimination Period, you are responsible for paying your own costs. It’s equivalent to a deductible in many types of insurance. If you are purchasing a new policy, a 20- or 30-day elimination period is typically the shortest option offered by high-quality LTCI insurers. This means you will be responsible for 100 percent of the cost of the first 20 or 30 days of your care. Any reimbursement from another source, such as health insurance or Medicare, will count toward your Elimination Period. (Most policies require one Elimination Period for all types of care, but a few policies waive it for home care.) Also: a good policy will require you to cover this Elimination Period just one time; even if you stop receiving LTC for a period and then begin coverage again, you should not have to pay for a second Elimination Period if you were to resume receiving benefits. Finally, most policies require you to incur charges for covered services to meet the Elimination Period, but a few just require you to wait the number of calendar days in the Elimination Period before benefits begin, with no charges required.
ENDORSEMENT: A written agreement that changes the terms of an insurance policy by adding or removing coverage.
ENDORSEMENT: A written agreement that changes the terms of an insurance policy by adding or subtracting coverage.
EQUIPMENT AND HOME MODIFICATIONS: This option provides reimbursement for the cost of adding safety equipment to your home, such as ramps, special beds and grab bars. Some plans include coverage for these expenses at no additional premium, especially plans with an "alternate plan of care" benefit as that feature allows payment for these types of expenses if the family, doctor and insurance company all agree the charges are cost effective and will help the patient stay home for a significant amount of time.
EXCLUSION: A contractual provision in an insurance policy that denies or restricts coverage for certain perils, persons or types of property. A typical exclusion in an automobile policy is one that states if an insured intentionally inflicts bodily injury or property damage, coverage is excluded. An insurance company is simply saying that if an act is deliberate, it isn't covered.
EXCLUSION: A contractual provision in an insurance policy that denies or restricts coverage for certain perils, persons, property or locations.
EXCLUSIONS: Circumstances where coverage will not be included. Examples include: Alcoholism, intentionally self-inflicted injuries or attempted suicide, and drug or narcotic addiction. Any care that is provided by your immediate family will not be reimbursed.

Circumstances where coverage will not be included. Examples include: Alcoholism, intentionally self-inflicted injuries or attempted suicide, and drug or narcotic addiction. Any care that is provided by your immediate family will not be reimbursed.
EXCLUSIONS: Circumstances in which coverage will not be included. Examples include: Alcoholism, intentionally self-inflicted injuries or attempted suicide, and drug or narcotic addiction or care due to war-related injuries. With a "reimbursement" policy, any care that is provided by your immediate family will not be reimbursed, unless your policy has an informal care benefit that includes immediate family members. Expenses paid by Medicare are also excluded, including amounts that would be applied to Medicare's deductibles and coinsurance. An indemnity or cash LTCI plan will pay in addition to Medicare.
EXTENDED REPLACEMENT COST: The level of coverage on a homeowner policy. With basic Replacement Coverage, your payout is limited to the maximum dwelling limit coverage on your policy. But with Extended Replacement Cost coverage your max payout can actually exceed your dwelling limit coverage. Instead of receiving 100 percent of your dwelling limit coverage, your insurer may pay you up to 120 percent or more to cover repair and rebuilding costs. Extended Replacement coverage is recommended over general Replacement Coverage. But the absolute best level of coverage-if it is available in your region-is Guaranteed Replacement Cost coverage; in the event of a covered claim, your insurer will pay the full cost of repairs and rebuilding regardless of the cost.

This is a type of Long-Term Care Insurance policy that provides care in an assisted living facility and in a nursing home. It can be appropriate for someone who doesn't have a primary caregiver as very few people can afford a LTCI policy that would pay for around-the-clock home care. Savings for a Facility-Only Plan vs. a comprehensive LTCI policy with home care and adult day care benefits range from 20%-40%.

FAMILY MEMBER

A person related to the insured by blood, marriage, or adoption and a resident of the household. This definition generally includes a ward or foster child, as well as a child away at school or in the military.

FIXTURE

Personal property that becomes real property when attached in a permanent manner to real estate.

FLOOD INSURANCE

Flood insurance protects against damage caused by the rising or overflowing of bodies of water. Flood insurance is available separately from a home-owner’s, renter’s, or condo-owner’s policy through a program developed by private industry and the federal government. Those who purchase flood insurance will have coverage caused by storm surge, wave wash, tidal waves, or the overflow of any body of water over normally dry land areas. A hurricane, heavy rains, and winter runoff all cause flooding. Surface water that accumulates and rises due to rain or snow or even because of inadequate/overloaded drains can also cause flooding.

FORMAL CAREGIVER

Licensed professionals such as Registered or Licensed Practical or Vocational Nurses, therapists (e.g. physical or speech) or certified home health aides or certified nurse assistants (CNA's) are considered formal caregivers.

FORMS OF HOMEOWNERS INSURANCE:

The insurance industry uses the word “form” to describe the different types of property insurance policies that they sell. The following information outlines the three most common types of insurance sold:

The HO-3 special form is designed for owner occupied homes and is an all risk form that provides dwelling and other structure coverage against all perils except those specifically excluded from coverage. It provides personal property and liability coverage.
The HO-4 tenants form is a form used by renters. It does not cover the dwelling, since the renter does not own the dwelling. It provides personal property and liability coverage.
The HO-6 condominium or co-op form includes limited dwelling coverage, as the master association policy generally covers the dwelling (a HO6 policy affords "interior dwelling" coverage). It provides personal property, liability coverage and loss assessment coverage (protecting the insured against unforeseen association assessments due to loss).

FREE LOOK PROVISION

After a policy has been delivered to an applicant, they have 10 days to review the policy and can return it for full refund if they chose not to accept the policy.

FREE LOOK PROVISION

After a policy has been delivered to you, you then have 10 days to review the policy; if you return the policy within that time you will receive a full refund.

FUTURE PURCHASE OPTION (DISABILITY)

This option permits you to purchase additional disability coverage without having to take a medical exam.

FUTURE PURCHASE OPTION (LTCI)

Sometimes called Guaranteed Purchase Option, this is a type of inflation benefit that allows you to buy extra benefit as you get older, perhaps every year or every three years. The offers are generally priced at your attained age which means your premium will increase each time you accept an offer. Some policies will stop the offers when you start receiving benefits. This type of inflation benefit may help a younger person afford long-term care insurance but it is in your best interest to change to annual guaranteed inflation increases as soon as you can afford to do so. Also, this type of inflation benefit does not qualify as a Long-Term Care Partnership policy in most states if the effective date of your policy is before your 76st birthday.

G

GAP COVERAGE: Insurance for new car buyers who finance their car with a loan or lease. Given the rapid depreciation of your car in its first year-generally 20 percent or more-you could find that the money you owe on your loan or lease exceeds the insurance payout for the car if it were wrecked in the first year or so after you bought/leased it. With a gap policy you will get a payout to cover the difference between what the insurer pays for the depreciated value of the wrecked car, and what you still owe on the loan/lease. To qualify for gap coverage, insurance companies require the vehicle be insured for comprehensive and collision, and that you request the extra coverage within 30 days of leasing or financing the vehicle.
GRACE PERIOD: If you are late on paying the premiums, companies allow a grace period. A typical grace period is 31 days.
GRACE PERIOD: If you are late paying your premium, companies allow a grace period, typically 31 days.
GROUP LIFE INSURANCE: Life insurance offered by an employer to their employees.
GROUP LONG-TERM CARE INSURANCE PLANS: Employer-offered group plans may be cheaper than individual plans, but most have longer elimination periods, limited payout periods, fairly rigid benefits, poor inflation protection and no spousal discounts. If you are considering purchasing a group plan, make sure you compare the benefits to what is available with a good individual plan. The exception is when the employer is offering you an individual policy with a premium discount and a one-time opportunity for existing employees to apply with limited underwriting for a short period of time, such as 30-90 days. You can tell the difference by asking if you will receive a policy or a certificate. A certificate means it is a true group policy which means it may be changed if your employer elects to change insurance carriers. An individual policy belongs to you, not your employer.
GROUP LONG-TERM DISABILITY (LTD) COVERAGE: Offered by an employer to their employees. Generally proof of insurability is not required. The premium, compared to an individual disability policy is lower, though the benefits may not be as generous.
GUARANTEED RENEWABLE: This policy feature means that the insurance company cannot cancel your policy, as long as you continue to make timely premium payments. An insurance company does have the right to increase premiums subject to the review, and in most states approval of the department of insurance. However, if the premium increase is approved, it will be for the entire class of policyholders by state and class.
GUARANTEED RENEWABLE (LTCI): This policy feature means that the insurance company cannot cancel your policy, as long as you continue to make timely premium payments. An insurance company does have the right to increase premiums subject to the review and in most states, approval of the department of insurance. However if the premium increase is approved, it will be for the entire class of policyholders by state and class, not just for your policy.
GUARANTEED REPLACEMENT: If your home is damaged, this coverage ensures a payout equal to the full value of the repairs. There's no cap or maximum payout amount on guaranteed replacement coverage. This type of coverage generally costs more, but it provides the most protection. Also, this type of coverage isn't offered by all insurance companies and sometimes cannot be purchased from any insurance company in a specific state (i.e. California).

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HAZARD INSURANCE

Typically another name for homeowners insurance. This is insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards (except those excluded in the policy).

HEALTH INSURANCE

If you get sick or hurt and are treated by a doctor or require hospitalization, your health insurance will pay for these expenses, usually as long as you are showing progress. However, if you just require assistance with the activities of daily living (ADLs) and/or need help due to a cognitive impairment, your health insurance will not pay for caregivers. Long-Term Care insurance pays for assistance with ADLs and for care needed due to cognitive impairment, such as senile dementia or Alzheimer’s. Another way to look at the difference is that health insurance pays for short-term recovery care to get you better, whereas long-term care insurance pays for chronic, maintenance care which is expected to last longer than three months.

HOME AND COMMUNITY-BASED CARE

Consists of the following:

Home health aides and personal care attendants: Help with personal hygiene, simple health care tasks, performing the activities of daily living, managing medications and other supportive tasks.
Homemaker Services: Help with preparing meals, doing laundry and other incidental chores.
Chore Services: Help with simple household repairs, taking out the trash and other tasks that don't require special skills.
Adult Day Care: Provides social and health-related services during the day in a community setting.
Skilled Services: Nursing care, help with physical, occupational, respiratory and speech therapy.
Respite Care: Pays benefits for temporary care you received to provide time off for your primary, unpaid caregiver (such as your spouse or child). Costs of temporary care are typically covered for up to 21 days per year, and many plans pay for inpatient respite care as well as respite care at home.
Caregiver Training: Provides a benefit to educate unpaid informal caregivers - such as friends or relatives - on how to provide your care.
Equipment and Home Modifications: Provides a benefit for the costs associated with items, such as ramps, special beds and grab bars.
Other Care and Services: Not all needs can be anticipated. If you, your doctor and the insurance company agree that something outside the scope of the policy would be helpful in your care, it may be added to your Plan of Care if your policy contains a provision called “Alternate Plan of Care”, or if any portion of your daily or monthly benefit is paid on a cash basis.

HOME HEALTH AIDE AND PERSONAL CARE ATTENDANTS

Caregivers who help with personal hygiene, simple health care tasks, performing the activities of daily living, managing medications and other supportive tasks.

HOME HEALTH CARE (HHC)

This provides for skilled care to be provided at home by a registered nurse (R.N.), a licensed practical nurse (L.P.N.) or Licensed vocational nurse (L.V.N.) or for other professional services such as physical, occupational, speech or respiratory therapy or for non-skilled care to be provided by a certified nurse assistant (CNA), also referred to as a home health aide. Most policies do not require you to hire these individuals through a home health agency as benefits are available for licensed professionals who are practicing within the scope of their license; i.e. freelancing their services.

HOMEMAKER SERVICES

Help with preparing meals, doing laundry and other incidental chores necessary to or consistent with your ability to remain in your home. Some policies will pay for homemaker services only if you are simultaneously receiving the services of a licensed home health aide. Ask your agent how homemaker services are paid.

HOMEOWNERS ASSOCIATION

A group that governs a modern subdivision or planned community. An association collects monthly fees from all owners to pay for maintenance of common areas; handle legal and safety issues; and enforce the covenants, conditions, and restrictions set by the developer.

HURRICANE INSURANCE

A hurricane is a windstorm with 75 or more mile-per-hour winds. Windstorm damage is covered in standard home-owner’s, renter’s and condo-owner’s policies. But consumers that live in areas vulnerable to hurricane damage may have to buy separate coverage.

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IDENTITY THEFT: One of the fastest growing white-collar crimes in the nation. Criminals obtain an individual's personal data (such as a credit card number or Social Security number) and use the information to assume this individual's identity. The criminal thief may take over existing accounts or use the personal information to open new accounts or even apply for loans.
IDENTITY THEFT OR FRAUD COVERAGE: This coverage on your home-owner’s, condo-owner’s or renter’s insurance policy will generally pay for lost wages caused if you need to miss work to deal with cleaning up your accounts after becoming a victim of identity theft. Attorney fees are also covered, as are loan fees if the theft results in the delay or initial denial of a loan application. .
INCOME TAX: Taxes you pay to federal and state government on your income.
INCONTESTABILITY: An insurance Company's has two years from the policy date to find out if any misrepresentations were made by an insured. After two years policy becomes incontestable. However, if the policyholder committed fraud, the an insurance company can contest the policy at any time.
INCONTESTABILITY: Insurance Company's have two years from the date of the issue of the policy to find out if any misrepresentations were made by the insured. After two years the policy becomes incontestable. However if a fraud was committed then insurance companies may contest the policy.
INDEMNITY POLICY/PER DIEM: An LTCI policy that is an Indemnity policy requires claims to be filed to prove services but pays the daily benefit irrespective of what actual charges were incurred by the insured. Therefore if the actual charges were lower than the daily benefit, you can pocket the difference and use the money as you choose. However, under current tax laws any benefit payment received above $360/day in 2017 (this amount is adjusted for inflation each year) and that is above the actual cost of long term care will be considered taxable income. (For example: If your daily benefit is $400/day and the actual charges for care were $370/day, the first $360 is tax free but the additional $40 would be taxable unless you could provide proof that you spent the entire $400 on eligible LTC expenses.) Plans that are Reimbursement/Pool of Money, are generally less expensive then the indemnity or cash approach, as they pay no more than the actual charge, and there is no tax issue.
INFLATION GUARD: An important provision that provides for automatic periodic increases in the dwelling limit coverage on a homeowners policy. This coverage is often times included in a homeowners policy, but sometimes will need to be added by endorsement. The purpose of the inflation guard coverage is to allow the dwelling limit to keep pace with inflation and the resulting increases in construction costs.
INFLATION PROTECTION: This policy features helps your disability income benefit keep up with the rising cost of living.
INFLATION PROTECTION OPTIONS: Long-term care costs are expected to rise each year; therefore you need to make sure that your policy’s benefits will increase in line with inflation.

If you are under age 70, it is smart to choose COMPOUND Inflation Protection. Your Daily or Monthly Benefit and Personal Benefit Account will grow each year by a specific percentage of the previous year’s maximum benefits. Typically, this amount has been 5% compound. However, the insurance companies have made the 5% compound inflation benefit too expensive. So I’m recommending a higher daily/monthly benefit with 3% compound inflation. For example, a $4500 monthly benefit will grow to $15,200 in 25 years at 5% compound. A $7500 monthly benefit will grow that much at 3% compound, typically with a lower premium. Long-Term Care Partnership policies require compound inflation for policies with an effective date prior to your 61st birthday. Click here to see the inflation requirements for your state’s Long-Term Care Partnership.

If you are 70+, you can save money by having your daily or monthly benefit grow a specific number of years (e.g. 15 or 20) instead of for the rest of your life.

The Future Purchase Option, aka Guaranteed Purchase Option type of inflation benefit is not an approved inflation option for Long-Term Care Partnership policies for for people who buy under age 76.
INFORMAL CAREGIVER: Unlicensed caregivers are considered informal caregivers and can include friends, family members as well as caregivers you hire from services that provide sitters and companions. If you pay an informal caregiver directly, the IRS may consider you an employer, so you may want to seek advice from your accountant on how to handle this role from a tax standpoint.
INSTRUMENTAL ACTIVITIES OF DAILY LIVING (IADL): Activities like preparing meals, doing laundry, housekeeping, managing medication, using of telephone, keeping a checkbook, and shopping for necessary items are examples of Instrumental Activities of Daily Living.
INSURABILITY: In order to purchase insurance, one has to be insurable. An insurance company determines insurability by examining your health history, conducting face-to-face assessments, telephone interviews and sometimes an insurance exam. If all these items are found satisfactory an offer to insure will be made. With long-term care insurance, a progressive condition such as Alzheimer's, Parkinsons disease, Lou Gehrig's disease, MS or combined conditions such as diabetes and peripheral vascular disease will usually make you uninsurable. Stable conditions such as high blood pressure or diabetes without complications are usually insurable. Reasonable height and weight is expected. Younger applicants usually find it easier to qualify for long-term care insurance than older applicants, but an insurance professional can help you know if an LTCI company will consider you.
INSURABLE INTEREST: At the time of purchase of an insurance policy, the beneficiary of the policy must have an insurable interest in the insured. For example, a wife has an insurable interest in the life insurance policy of her husband. This means that the beneficiary has something to lose in the event of the death of an insured and they are purchasing the policy to make up for that loss at least financially.
INSURANCE: A contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy, and the periodic payment is known as an insurance premium.
INSURANCE: A contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy, and the periodic payment is known as an insurance premium.
INSURANCE AGE: Is the age in which the insurance company will calculate your premiums. Some companies will base your premiums on the age at you last birthday and others use your age closest to the nearest birthday.
INSURANCE DEPARTMENT: A state governmental agency that has responsibility for the enforcement of the state's insurance code. It is charged with the supervision and licensing of insurance companies and agents, as well as the general administration of the insurance laws of the state.
INSURANCE DEPARTMENT: A state government agency that has responsibility for the enforcement of the state's insurance code. It is charged with the supervision and licensing of insurance companies and agents, as well as the general administration of the insurance laws of the state.
INSURANCE SCORE: A variation of your credit score that some insurance companies use to assess whether to offer you a policy, or what premium to charge you. Each insurance company has a different scoring system, but generally they look at the same factors used in determining your credit score, including your payment history, whether you have filed for bankruptcy, or have bills with collection agencies. Insurance Scoring is not allowed in all states.
INSURANCE SCORE: A variation of your credit score that some insurance companies use to assess whether to offer you a policy, or what premium to charge you. Each insurance company has a different scoring system, but generally they look at the same factors used in determining your credit score, including your payment history, whether you have filed for bankruptcy, or have bills with collection agencies. Insurance Scoring is not allowed in all states.
INSURED: The individual or individuals protected by the insurance policy. An insured is also referred to as a policyholder.
INSURER: The insurance company is the insurer. This company issues a policy to an insured (i.e. policyholder) and promises to pay specific losses and render certain services when certain events happen.
INSURER: The insurance company is the insurer. This company issues a policy to you (i.e. policyholder) and promises to pay specific losses and render certain services when certain events happen.
INTERNATIONAL COVERAGE: Not all companies offer International Coverage. If youanticipate that you will want to long term care outside of the United State, then you should make sure your policy provides International coverage.

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JUDGMENT: A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.
JUDGMENT: A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.

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LAPSE: A policy will lapse if the premiums are not paid within the grace period (31 days from the due date). An insurance company will not pay any death benefit, if the insured dies after the policy has lapsed.
LAPSE: If your premium is not paid within the grace period (typically 31 days from the due date) your insurer will not pay any benefits for disabilities that occur after the policy has lapsed.
LAPSE (LTCI): If you do not pay premiums when due, your policy can lapse. Tax-qualified policies require that individuals whose policies have lapsed due to nonpayment of premium caused by a functional (physical) or cognitive impairment are allowed to pay back premiums for at least five months to reinstate their policies, no questions asked.
LAPSE PROTECTION: Should your policy lapse due to late payments, it can retroactively be reinstated if within at least five months after the lapse the company receives proof that you failed to pay your premium due to a cognitive or functional (physical) impairment, and if you pay all past due premiums. Some states or companies require longer. For example, if you suffered from a cognitive impairment and failed to pay your bill on time, but discovered the lapse within five months (or the amount of time your state or insurance company requires, if longer), you could pay the balance owed at that time and your coverage would be reinstated so that your claim can be paid.
LATE PAYMENT PROTECTION: To help make sure your policy doesn't lapse by mistake, you can designate another person to be notified if the company doesn't receive your payment on time. This is also called "third party notification".
LEVEL PREMIUM TERM: The most common type of term insurance purchased. With a level term policy, your premiums would be level (i.e. the same) for the term you have chosen, usually 5, 10, 15, 20 or 30 years. The insurance company takes your current age and the term you choose into consideration and figures out the average stable premium you will have to pay to keep the policy in effect for all those years. Obviously, the older you are and the longer the term you sign up for, the higher the premium will be, but you have the peace of mind in knowing your premium will never increase.
LIABILITY -BODILY INJURY AND PROPERTY DAMAGE: This coverage provides protection should the insured unintentionally cause bodily injury, including death, and/or property damage to others and becomes legally obligated to pay damages. s
LIVING DEATH BENEFIT: These are riders on life insurance policies, also known as accelerated death benefits. They pay out your death benefit while you are still alive, usually if a doctor certifies that you are terminally ill with less than a year to live. The idea is that you can use these funds for medical care or comfort. The benefit may increase the price of your premiums and usually doesn't pay as much as your heirs would have received after your death.
LOAN/LEASE COVERAGE: See Gap Insurance
LONG TERM CARE INSURANCE: This is coverage to help you deal with the unexpected costs that arise if you are unable to do simple functional daily activities on your own such as bathing yourself, getting dressed, going to the bathroom or eating - or if you have a severe cognitive impairment. If you are expected to need help with at least two of these Activities of Daily Living (ADLs) for at least 90 days or suffer from a severe cognitive impairment, long term care insurance can help cover the cost of care in your own home, in an adult day care center, an assisted living facility, or in a nursing home. Many LTC insurance plans also cover hospice, and many will pay hospice benefits with no deductible.
LONG-TERM CARE: This is any type of medical, social, or support service you may need over an extended period of time, usually longer than 90 days. Elderly or chronically ill people may eventually need help eating, bathing, dressing, transferring (from bed to a chair), toileting, continence, taking medicine, shopping, doing laundry, cleaning, or getting around outside. These services for assistance can be extremely expensive and, in most circumstances, Medicare, Medigap, or health insurance will not pay for caregivers to help with these services at home or in an assisted living or nursing facility. Younger people can need LTC due to an automobile, motorcyle or sporting accident, stroke or other debilitating condition such as Lou Gehrig's disease (ALS), brain tumor, early Parkinson's disease and the like.
LOOK-BACK PERIOD FOR MEDICAID: If you transfer/gift your assets in order to qualify for Medicaid benefits, then there is a 60 month look back period (30 months in California). If a transfer for less than fair market value is discovered, generally you will have to wait for Medicaid to pay your LTC costs the amount of time you could have paid had you used the money to pay for your long-term care.

NOTE: Medicaid is also known as Medi-Cal in California, MassHealth in Massachusetts, MaineCare in Maine, TennCare in Tennessee.
LOSS: The amount sought in a claim or the amount paid on behalf of you under an insurance contract.
LOSS ASSESSMENT COVERAGE: Insurance to cover the costs of a special assessment (above regular dues) charged by a condominium or homeowners association to cover major property and liability losses not fully covered by the association's master policy. .
LOSS OF USE COVERAGE: See Additional Living Expense Coverage
LOST WAGES: If someone is badly injured in an accident and can't work for a period of time, they can make a claim for lost wages to get the money they would have earned by working. Lost wages is considered to be a special damage by the insurance company.
LTD (LONG-TERM DISABILITY) INSURANCE: Insurance that will provide income equal to up to 66 percent of your salary if you become disabled.

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MASTER ASSOCIATION: A homeowners' association in a large condominium or planned unit development (PUD) project that is made up of representatives from associations covering specific areas within the project.
MASTER POLICY: This is a policy insuring a condominium association, homeowners association or a co-op board. The master policy primarily: 1) insures the common areas such as a clubhouse, swimming pool, stairways, elevators, heating and air conditioning system, etc. 2) provides liability coverage for the association members 3) may or may not cover individual units before improvements and often times does not cover fixtures.
MAXIMUM LIFETIME BENEFIT AMOUNT: This is the maximum amount an insurance company will pay out under the policy. If you have selected a lifetime/unlimited benefit period then there is no maximum lifetime benefit. If you have selected a benefit period for a certain duration, then your maximum lifetime benefit would simply be the daily or monthly benefit amount x number of days or months the benefit is payable; e.g. $150 daily benefit x three years (1,095 days) = $164,250 or $4500 x 36 months = $162,000. An Indemnity or Cash policy will pay the entire Maximum:Lifetime Benefit Amount out in the exact time frame you purchased. A Reimbursement LTCI policy will pay no more than the actual charge, so the benefits will last until all of the money is spent, sometimes for years longer than the timeframe you purchased. This can happen especially if the home care benefit is paid at a lower percentage than the facility benefit and/or if home care is only needed a few days a week. With any of these methods, benefits are payable only as long as you qualify for benefits either with needing help with at least two of the basic activities of daily living (bathing, dressing, transferring, eating, toileting or continence) or have a severe cognitive impairment that threatens your personal safety or that of others.
MEDICAID (MEDI-CAL, MASSHEALTH, MAINECARE, TENNCARE): This a combined federal and state welfare program that covers medical care for poor Americans (and about two-thirds of all the people who are in nursing homes today). In order to qualify for Medicaid to pay for long-term care, you must meet stringent asset and income requirements and be medically needy, which usually means you must need help with at least three Activities of Daily Living, depending on your state. Once you have qualified for Medicaid LTC benefits, you must adhere to whatever your state offers in that arena, which usually means an emphasis on nursing home care instead of extended home and community care, like assisted living facilities.

NOTE: Medicaid is also known as Medi-Cal in California, MassHealth in Massachusetts, MaineCare in Maine, TennCare in Tennessee.
MEDICAL NECESSITY: These services are consistent with accepted medical standards for the condition and are recommended by a physician. A doctor may certify that it is medically necessary for you to have long-term care; for example, if you are unstable and in danger of falling. However, tax-qualified LTCI policies aren'l allowed to pay claims based on the need for medically necessary care. The Federal government requires that tax-qualified policies pay benefits only when the policyholder either is expected to need help with two or more Activities of Daily Living for at least 90 days or have a severe cognitive impairment. Most insurance companies only offer tax-qualified LTCI policies. However your policy may allow a claim to be paid if you need medically necessary care if you purchased it prior to 1/1/97. If so, you still have a tax-qualified policy as the Federal government “grandfathered” all LTCI policies issued before 1/1/97.
MEDICAL PAYMENTS OR PERSONAL INJURY PROTECTION: Medical payments insurance covers medical expenses that result from an auto accident, regardless of who is at fault. It covers people riding in an insured's car and will cover funeral costs. Medical payments will also provide coverage for an insured (including their covered family members), if they are a pedestrian and are hit by a car.

No-fault states have a form of medical expense coverage called Personal Injury Protection (PIP). In addition to medical bills, PIP covers lost wages, certain services (such as child care) that the covered individual is unable to perform, and some funeral expenses.
MEDICAL PAYMENTS TO OTHERS COVERAGE OR LIMIT: Pays a person’s medical bills regardless of the insured’s legal responsibility when an accident involves bodily injury to others. Most policies will pay up to $1,000 per person, however, higher limits are available and recommended. The medical payments coverage is sometimes called “coverage F.”
MEDICARE: Medicare does not cover long-term care. It pays for short-term skilled care, designed to get you better. Some examples are physical and speech therapy after a stroke or an accident. With traditional Medicare, you must be in an acute-care hospital at least three days before entering a Medicare-approved skilled nursing facility. You are only covered at 100% for the first 20 days; for the next 80 days you are required to pay a daily copayment with Medicare covering the remaining expenses. At home, Medicare may provide a few weeks of visits, not eight-hour shifts, if periodic skilled care is needed. If no skilled care is needed; e.g. an Alzheimer's patient, then Medicare does not provide any benefits at home or in a nursing home. With a maximum benefit of 100 days in a nursing home and usually much less time at home, the bottom line is that Medicare pays only for short-term care at home or in a nursing home, not long-term care.
MIB (MEDICAL INFORMATION BUREAU): The MIB maintains a data base of life, health, disability and long-term care insurance applicants. The sources of this information are member insurance companies. At the time a life insurance application is taken, an applicant is asked permission to release any necessary information to the MIB.

The purpose of the MIB is to prevent misrepresentation/fraud or concealment of information by the applicant that could impact a person's mortality or morbidity. The MIB allows consumers to get one free record disclosure annually about any information MIB may have in their database. If you have applied for insurance within the last 7 years, then you should request a free copy of the record disclosure. You can obtain this by calling toll free 866-692-6901.
Also here is a link to MIB's website:
http://www.mib.com/html/request_your_record.html
MIB (MEDICAL INFORMATION BUREAU): The MIB maintains a data base of life, health, disability and long-term care insurance applicants. The sources of this information are member insurance companies. At the time a life insurance application is taken, an applicant is asked permission to release any necessary information to the MIB. The purpose of the MIB is to prevent misrepresentation/fraud or concealment of information by the applicant that could impact a person's mortality or morbidity. The MIB allows consumers to get one free record disclosure annually about any information MIB may have in their database. If you have applied for insurance within the last 7 years, then you should request a free copy of the record disclosure. You can obtain this by calling toll free 866-692-6901. Also here is a link to the MIB's website: http://www.mib.com/html/request_your_record.html
MISSTATEMENT OF AGE AND GENDER: If the insured misstated their age and gender at the time application was taken, an insurance company will make an adjustment in death benefit when a death claim is filed. They will determine what the actual death benefit should have been, based on the premium paid by the insured, if the correct age and gender had been stated correctly. The payment by the insurance company will be made according to this new death benefit.
MODIFIED OWN-OCCUPATION: this type of policy covers you for what is known as an "own-occupation" AND not working in any other occupation. This is more restrictive definition than pure "own-occupation", in which if you become disabled and can no longer perform your current occupation, regardless of what other kinds of work you might be able to do; the insurance company will pay you benefits.
MONTHLY BENEFIT: is the amount that will be paid out each month from the policy in the event of a disability.
MONTHLY BENEFIT (LTCI): Many daily benefit LTCI policies offer an option for additional premium to have home care benefits paid on a weekly or monthly benefit basis. Select this option if you can afford it as it gives you more flexibility in how you use the available dollars. For example, if your daily benefit amount is $100, then your monthly benefit amount will be $3,000 ($100 Daily benefit amount x 30 days in a month.) You can use $3,000 in a few days, or spread it out over the course of the entire 30 days. For example, you could need care on a particular day for a substantial number of hours at a cost that would exceed your daily benefit. Or, you could need services from a home health aide and a therapist (occupational, physical or speech) in addition to homemaker or home health aide services. The cost of these combined services could easily exceed your daily benefit. If your policy reimburses on a weekly or monthly benefit amount basis, you will have more flexibility and may not have to pay for any expenses out of your pocket. Some plans only offer monthly benefits for all types of care, not just home care, and no extra premium is needed for this flexibility.

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NAMED PERILS: Perils specified in a policy as those against which the policyholder is insured.
NAMED PERILS: Perils specified in a policy as those against which the policyholder is insured.
NET WORTH: The value of all your assets, including real estate, minus your debts.
NO FAULT AUTO INSURANCE: A system of automobile insurance where a party who is injured in an automobile accident recovers damages from his or her own insurance company, regardless of who was responsible for the accident. This auto insurance law requires the insurance companies of each person in an accident to pay for medical bills and lost wages of their insured, up to a certain amount, regardless of who was at fault. The effect of no-fault insurance laws is to eliminate lawsuits in small accidents. The advantage is the prompt payment of medical bills and expenses. The downside is that the amounts paid by no-fault policies may not be enough to fully cover a person's losses and that no-fault does not compensate for pain and suffering.

Currently 12 states and Puerto Rico have no-fault auto insurance laws: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah. Three states have a "choice" no-fault law. In New Jersey, Pennsylvania and Kentucky, motorists may reject the lawsuit threshold and retain the right to sue for any auto-related injury.
NON-CANCELABLE AND GUARANTEED RENEWABLE: In a "non-cancelable and guaranteed renewable" policy, the company can neither cancel the policy (if premiums are paid on time) nor can it increase the premiums (until you reach age 65).
NON-FORFEITURE BENEFIT: Under this option, if your policy lapses due to nonpayment of premiums, and you have held it at least three years, you will be entitled to benefits equal to the greater of 30 times your daily benefit or the total amount of premium you have paid at any point in the future, even though your policy is no longer in force. This option increases the cost of your policy, and if money is an issue it is not recommended.
NON-REIMBURSED MEDICAL EXPENSES: Any health care costs that are not reimbursed by health insurance, such as co-pays and deductibles.
NON-TAX QUALIFIED (NTQ) PLANS: With a tax-qualified plan (TQ), your long-term care insurance premiums may be tax deductible. With a non-tax-qualified plan (NTQ) — which has become less widely available in recent years — you may not get the tax deduction. The other major difference is in what “triggers” the benefits in a TQ versus and a NTQ policy. If you have a TQ plan — which represents 99% of the policies sold today — in order to qualify for benefits, you must meet one of two conditions, as follows: The first condition is to be expected to perform two or more of six activities of daily living (ADL”s) for at least 90 days. In order to function normally, most of us need to be able to (1) feed ourselves; (2) clothe ourselves; (3) transfer ourselves (get in and out of bed, chairs, and the like, unattended); (4) be continent; (5) use the toilet; and (6) bathe ourselves. The second condition is cognitive impairment, which simply means that you qualify if you develop, say, Alzheimer's disease or cannot think or act clearly and therefore become a danger to yourself or others. In addition to certifying one of these two conditions, a licensed health care practitioner must develop as 12 month plan of care for you.

In a non-tax qualified (NTQ) plan, you can usually claim your benefits with a different condition, which is known as medical necessity. This is when a doctor certifies that it is medically necessary for you to have long-term care-for example, if you are unstable and in danger of falling. This is an easier way to access benefits, but it is becoming less widely available as most companies do not offer a non-tax qualified policy.

Finally, it is not clear that benefits from non-tax qualified plans issued on or after January 1, 1997 are tax-free. Long-term care insurance policies issued prior to 1/1/97 have been "grandfathered" by the Internal Revenue Service to be a tax-qualified policy for taxation purposes.
NURSE: This term refers to a registered nurse (RN), licensed vocational nurse (LVN), or licensed practical nurse (LPN). These nurses are licensed by state authorities.
NURSING FACILITY/NURSING HOME: These are facilities licensed under the laws of jurisdiction where they are located and operate similar to a hospital, except that they provide a wide range of non-skilled custodial services on an inpatient basis in addition to providing a wide range of skilled medical services. Services are provided 24 hours a day. In the US, nursing homes are required to have a licensed nurse on duty 24 hours a day, and during at least one shift each day, one of those nurses must be a Registered Nurse (RN). A daily medical record is kept of each patient residing at the facility. Many people wrongly assume long-term care means only nursing home care. Fewer than 15% of long-term care patients are in nursing homes. (Health Affairs, January 2010)

O

OTHER STRUCTURES COVERAGE OR LIMIT: Not all structures at a residence are actually attached to the house. Therefore, other structures coverage, sometimes called “coverage B,” offers insurance protection for other structures such as a detached garage, swimming pool, fencing, gazebo, or storage shed.
OTHER STRUCTURES LIMIT: Not all structures at a residence are actually attached to the house. Therefore, other structures coverage, sometimes called “coverage B,” offers insurance protection for other structures such as a detached garage, swimming pool, fencing, gazebo, or storage shed.
OWN OCCUPATION (OWN-OCC): If definition of disability in your policy were "own occupation," it would pay the disability benefit as long as you, the insured, cannot perform the duties of your own occupation. This is preferable to a policy that has an "any occupation" stipulation. With "any occ" you will only be paid a benefit if you can no longer perform any job, regardless of whether it is the same job you had prior to your disability.
OWNER: You can be the owner of your policy. You can also name a trust, your spouse or adult children as the owner. The owner of the policy has the right to make changes in the policy, such as changing the beneficiary, accessing cash values, making someone else the owner, assigning the policy etc. You should consult with your financial planner, accountant or attorney to see what the best way is for you to arrange the ownership of the policy. If a policy is not owned by yourself or a trust, you should also name a contingent owner. This will insure that, in the event primary owner dies before you do, your policy does not get passed on to their estate.

P

PAIN AND SUFFERING

The physical or emotional distress resulting from an injury. Though the concept is somewhat abstract, the injured plaintiff can seek monetary compensation. How much the defendant owes for pain and suffering is calculated separately from the amount owed for more direct expenses, such as medical bills or time lost from work -- although sometimes these are factored in to arrive at a logical figure.

PARTIAL DISABILITY

is a disability in which you are able to work on a part time basis.

PARTNERSHIP CERTIFIED

These are policies that meet the requirements for states that have implemented a Long-Term Care Partnership between Medicaid and private long-term care insurance. Only those agents who have completed training for ""Partnership"" policies are authorized to sell these policies. If you purchase an approved Partnership policy, this generally means that you will be allowed to shelter the same amount of assets that your Partnership policy paid out in benefits if you need to apply for Medicaid (Medi-Cal in California, MassHealth in Massachusetts, MaineCare in Maine, TennCare in Tennessee) long-term care benefits. New York has similar plans but also has two types of unlimited asset protection plans which may be seen at nyspltc.org/expansion. The premiums are the same for Partnership policies as for non-Partnership policies. To be Partnership-certified, plans implemented since February 8, 2006 must tax-qualified, meet certain consumer protection standards as defined by the National Association of Insurance Commissioners and provide specified inflation benefits based on the age of the applicant on the effective date of the policy (or certificate if it is purchased through a group long-term care insurance plan). Your insurance agent can tell you if they are available in your state or you can check at nyspltc.org.

PARTNERSHIP LONG-TERM CARE

California, Connecticut, Indiana and New York have offered “Partnership” Long-Term Care Insurance policies since the early 1990’s. If you purchase an approved Partnership policy, this generally means that you will be allowed to shelter the same amount of assets that your Partnership policy paid out in benefits if you need to apply for Medicaid (Medi-Cal in California and MassHealth in Massachusetts) long-term care benefits. (New York has similar plans but also have two types of unlimited asset protection plans which may be seen at nyspltc.org/expansion.) In all Partnership states, please note that Partnership policies provide asset protection, not income protection, for Medicaid patients.

Back to what the Partnership really means. Most states require you to spend your assets down to $2,000 before Medicaid will help pay for long-term care. If your Partnership policy paid out $100,000 in benefits and you had to apply for Medicaid's long-term care benefit because you could no longer pay the difference between what your policy pays and the cost of care, you would spend down to $102,000, not $2,000. If you are married, the amount of benefits paid out would be added to the assets your spouse would be allowed to keep if Medicaid approved your application for long-term care benefits. Federal legislation that passed in 2006 made it possible for other states to introduce LTCI Partnership plans and most states plan to do so. Your insurance agent can tell you if Partnership plans are available in your state. If they are, you must buy a certain level of inflation protection based on the effective date of your policy in order to get a bona fide Partnership policy with the asset protection feature. Click here to see the inflation requirements for those states that have implemented a Long-Term Care Partnership since 2006.

PAYOUT PERIOD

The minimum duration of time in which the policy will pay for your long-term care expenses; e.g. 1, 2, 3, 4, 5, 6, 7, 10 years. It is a minimum duration because any day or month you don't use your entire daily or monthly benefit, the unused amount stays in your benefit account and makes it last longer. Unlimited payout periods are available with very few companies, and claims experience has shown that a four-year payout period will pay the full duration of expected care for 80% of people who use their policy, and two-thirds of claims will be taken care of with a three-year payout period. Typically, people with a family history of Alzheimer's consider longer payout periods. Some policies offer a Benefit Account instead of a payout period such as $100,000, $200,000, $300,000, $500,000 or $1,000,000 which is paid out at a monthly amount that you choose.

PERIL

The cause of a possible accident, loss or claim. A peril is also a specific risk covered by an insurance policy, such as fire, windstorm or theft.

PERIL

The cause of a possible accident, loss or claim. A peril is also a specific risk covered by an insurance policy, such as fire, windstorm or theft.

PERMISSIVE USE BUYBACK COVERAGE

Several insurance companies limit the bodily injury and property damage coverage of your policy if someone other than a family member drives the covered vehicle. If the insurer determines that a "permissive driver" was behind the wheel, the insurance policy coverage can revert to the minimum coverage for the state. If your policy enforces this limitation, you may be able to purchase "buyback coverage"': in the event you loan out your car to a non-family member, any damages would be covered up the full value of your policy limits.

PERSONAL ARTICLE FLOATER

Insurance for specific items of property above and beyond coverage in your general policy. Typically floaters, or riders as they are sometimes called, are added to a policy to provide coverage for jewelry, fine arts, silverware, fire arms, valuable collections, etc.

PERSONAL BENEFIT ACCOUNT

This is the maximum amount an insurance company will pay out under the policy as long as you are eligible for benefits. If you have selected a lifetime/unlimited payout period then your Personal Benefit Account has no maximum. If you have selected a payout period for a certain duration, then your Personal Benefit Account would simply be the daily or monthly benefit amount x number of days or months the benefit is payable; e.g. $150 daily benefit x three years (1,095 days) = $164,250 or $4500 x 36 months = $162,000. An Indemnity or Cash policy will pay the entire Personal Benefit Account out in the exact time frame you purchased. A Reimbursement LTCI policy will pay no more than the actual charge, so the benefits will last until all of the money is spent, sometimes for years longer than the timeframe you purchased. This can happen especially if the home care benefit is paid at a lower percentage than the facility benefit and/or if home care is only needed a few days a week.

PERSONAL CARE

This refers to help for personal hygiene, simple health care tasks, performing the activities of daily living, managing medications, and other supportive tasks.

PERSONAL LIABILITY COVERAGE OR LIMIT

Insurance coverage that offers protection in the event you are sued for accidentally hurting another person(s) or damaging their property. Personal liability helps to cover the associated legal costs and related damages. Most policies include one of three limits: $100,000, $300,000, or $500,000. The limit of $500,000, or a higher amount if available, is always recommended. The personal liability coverage is sometimes called “coverage E.”

PERSONAL LIABILITY LIMIT

PERSONAL PROPERTY COVERAGE

Personal property coverage in a home-owner&rsquos, renters or condo-owner’s policy provides coverage for your possessions, such as clothing, furniture, electronics, sports equipment, and other miscellaneous household items. The level of coverage for certain types of personal property can be subject to a limit. You can obtain additional coverage for indivdual items by adding a floater or rider to the policy. The personal property coverage is sometimes called “coverage C” or contents.

PERSONAL PROPERTY COVERAGE PROVISIONS

In the event of a covered loss, a policy with replacement cost coverage will provide a dollar amount to repair damaged property or to replace it with new property of like kind and quality, without deducting for depreciation. Replacement Cost is far better than a policy with Actual Cash Value (ACV). With ACV, the payout is based on the depreciated value of the property to be replaced.

PERSONAL PROPERTY DESCRIPTION SPECIAL LIMIT OF LIABILITY

Money-limited to a total of $200. This includes bullion, coin collections, bank notes, gold, silver and platinum.
Securities-limited to $1,000. This includes accounts, bills, deeds, evidence of debt, letters of credit, notes, passports, manuscripts, stamps and stamp collections.
Watercraft-$1,000 total. This includes boats, trailers, furnishings, equipment and outboard motors.
Trailers not used with watercraft- $1,000 total.
Jewelry, watches, furs, precious and semi-precious stones-limited to $1,000 total loss when due to theft.
Silverware, pewterware, goldware, silver-plate-limited to $2,500 total loss when due to theft.
Firearms-limited to $2,000 total loss when due to theft.
Business property-limited to $2,500 while located on the described premises and to $250 while off premises.
Dual-powered electronic equipment in a vehicle-$1,000 total.

Why are special limits imposed on personal property items such as these? It's the fairest to all policyholders. For example, since most people don't own an expensive boat, it would be unfair to increase everyone's premium to cover the losses of the few who own big boats. Likewise, it would be unfair to force everyone to share in the losses of people with expensive collections - firearms, jewelry or silverware.

PERSONAL PROPERTY LIMIT

PERSONAL PROPERTY LIMIT TYPE

Your homeowners insurance policy will state that your personal property will be replaced either on an actual cash value (ACV) or a replacement cost basis.

When a loss is paid using ACV, you are entitled to the depreciated value (the cost to repair/replace the property less depreciation) of the damaged property. When a loss is paid using Replacement Cost, you are entitled to the amount necessary to repair/replace the damaged property with one of "like kind or quality" at current prices.

PERSONAL PROPERTY REPLACEMENT COST

Pays full cost to repair or replace most personal property with no deduction for depreciation.

PERSONAL UMBRELLA COVERAGE

See Umbrella Coverage

PERSONAL UMBRELLA COVERAGE

See Umbrella

PIP COVERAGE

See Medical Payments

PLAN OF CARE

A written personalized plan that is developed by a licensed health care practitioner, which could be a physician, a Registered Nurse or a licensed social worker. This Plan will clearly define how your long-term care needs will be met during the 12 month period.

PLANNED UNIT DEVELOPMENT (PUD)

A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.

POLICY

The printed document issued to the insured (policyholder) by a company stating the terms of the insurance contract.

POLICY

The printed document issued to the insured (policyholder) by a company stating the terms of the insurance contract.

POLICYHOLDER

See Insured

POOL OF MONEY/REIMBURSEMENT POLICIES

Most of the LTCI policies sold currently are pool of money/reimbursement type. These policies are popular because they are more affordable than an indemnity policy while providing comprehensive coverage. Pool of money type policies reimburse you up to your daily or monthly benefit. If the cost of care being received is less than the daily or monthly benefit, then the difference will continue to be part of the pool, and this will extend your benefit period and your Personal Benefit Account. By not paying out more than the actual charge, this feature of the policy may help stabilize premiums and hold down rate increases in the future.

PRE-EXISTING CONDITIONS

These are the medical conditions that existed prior to your Long-Term Care Insurance policy being issued by an insurance company. Once you are insured, you may be covered for any condition that requires care - even if you had the condition before you applied - if you disclosed it on your application, subject to the policy's exclusions; e.g. some policies exclude any care related to alcohol or substance abuse or nervous/mental disorders.

PREMIUM

The payment you (the policyholder) make in order to own an insurance policy. Premiums are typically paid either monthly, quarterly, or annually. You can often save money if you make one annual premium payment

PREMIUM

The payment you (the policyholder) makes in order to own an insurance policy. Premiums are typically paid either monthly, quarterly, or annually. You can often save money if you make one annual premium payment.

PREMIUM PAYMENT OPTION

Companies offer choices in premium payment options. While single-premium policies are rare, many companies allow you to pay premiums for a limited duration like 10 or 20 years or until you are age 65, but premiums are higher than if you choose a lifetime payment plan. People who find a limited pay option affordable may choose it to avoid rate increases in the future. While a class rate increase is possible during the limited pay period, once it is met, no additional premium will ever be required of the policyholder. Some companies also offer reduced premium options, such as reduced premium to 50% at age 65 or age 70. This means that your premium will drop to half of what it is when you hit the age you selected. You can still experience class rate increases with the reduced premium options.

PRESUMPTIVE TOTAL DISABILITY BENEFIT

If you have a complete and irrevocable loss of speech, hearing, sight or use of hands or feet, your insurance company will begin to pay you a disability benefit immediately; the elimination period is generally waived.

PRIVATE INSURANCE

The purchasing of a long-term care insurance policy is an example of private insurance vs.government funding options like Medicare or Medicaid. Remember, Medicare only pays for short-term care and Medicaid (Medi-Cal in California and MassHealth in Massachusetts, MaineCare in Maine, TennCare in Tennessee) requires you to qualify financially as well as medically for care. Buying a Long-Term Care Partnership policy ensures that you don't have to completely spend down to the Medicaid levels in your state as you are allowed to protect assets equal to the benefits paid by your policy when you apply for Medicaid.

PROPERTY DAMAGE

The property damage liability portion of a polic pays for damage to someone else's property resulting from an accident for which you are at fault.

PROPERTY DAMAGE LIABILITY

Property damage is generally the physical damage to property (a vehicle, street sign, telephone pole, fence, building, etc). The property damage liability portion of a policy pays for damage to another person's property resulting from an accident for which an insured person (or someone else driving the insured's vehicle with permission) is at fault and provides them with a legal defense.

Q

QUALIFYING FOR BENEFITS: In a tax-qualified (TQ) long-term care insurance policy, you qualify for covered benefits when a doctor, registered nurse (RN) or licensed social worker certifies that -

1. You need help with at least two of six Activities of Daily Living and are expected to need the help for at least 90 days. The Activities of Daily Living are:

Bathing Eating Dressing Toileting Continence Transferring

OR

2. You need help because you are severely cognitively impaired, meaning you have a significant deterioration or loss in your intellectual capacity (e.g. Alzheimer's disease) that makes you a threat to yourself or others.

In addition to the above certification, your doctor, registered nurse (RN) or licensed social worker, must develop a 12 month Plan of Care. The insurance company has the right to verify from time to time that you still need help for one of these two reasons and the care and services you receive are consistent with your Plan of Care.
QUOTE: An estimate of the cost (premium) for an insurance policy, based on information supplied to the agent, broker or insurance company.
QUOTE: An estimate of the cost (premium) for an insurance policy, based on information supplied to the agent, broker or insurance company.

R

RATE BANDING: Some companies charge a lower premium if you purchase a policy with a slightly higher death benefit. For example, there may be one rate break at $250,000 another at $500,000 and another at $1 million. So, if you are looking to buy $450,000 in coverage, have the agent quote you the rate for a policy with a $500,000 death benefit as well. In some instances, the premium for $500,000 may be about the same or lower as the policy with the $450,000 death benefit.
RATING AGENCIES: Companies such as AM Best, Moody's, Standard & Poor's and Fitch Ratings are independent companies that rate the safety and soundness of insurance companies. It is important to verify these ratings prior to purchasing a Long-Term Care Insurance policy.
REGISTERED DOMESTIC PARTNER: Some states now require insurance companies to treat a domestic partner the same as it would a spouse of an applicant. Most insurance companies do this regardless of state requirements.
REGISTERED NURSE (RN): A four year college graduate nurse who is licensed by the appropriate local authority.
REHABILITATION BENEFIT: This rider to a policy pays for the expenses of rehabilitation therapy if you participate in an insurance company approved rehabilitation program. This benefit is paid over and above the monthly disability income.
REIMBURSEMENT: Most of the LTCI policies sold currently are pool of money/reimbursement type. These policies are popular because they are more affordable than an indemnity policy while providing comprehensive coverage. Pool of money type policies reimburse you up to your daily or monthly benefit. If the cost of care being received is less than the daily or monthly benefit, then the difference will continue to be part of the pool and this will extend your benefit period and your Personal Benefit Account. By not paying out more than the actual charge, this feature of the policy may help stabilize premiums and hold down rate increases in the future.
REINSTATEMENT: If your policy has lapsed due to non-payment of the premiums, you may request a reinstatement of the policy. Your insurance company will require that you provide them with current health information. If your health has not changed, the company will reinstate the policy but you will have to pay all back premiums.
REINSTATEMENT: If your policy has lapsed due to non-payment of the premiums, you may request a reinstatement of the policy. The insurance company will require that you provide them with current health information. If your health has not changed, the company will reinstate the policy but you will have to pay all back premiums.
RENTAL REIMBURSEMENT (AKA TRANSPORTATION EXPENSE): This coverage may be optional on a policy. In the event of a covered comprehensive or collision loss, the policy will reimburse the insured up to the limit selected for expense incurred for substitute transportation while the insured vehicle is being repaired. Most commonly, this coverage is used to reimburse the insured for the use of rental vehicle.
REPLACEMENT: This term means the replacing of an existing policy with a new policy. Think carefully about replacing a LTCI policy issued prior to 1/1/97, as that policy has been grandfathered by the Internal Revenue Service to be a tax-qualified policy. Not only will the premium be eligible for current and future LTCI tax incentives, but the benefit trigger does not include the requirement that you must be expected to need long-term care for at least 90 days. Policies issued before 1/1/97 may also contain a medical necessity benefit trigger, which is not allowed in tax-qualified policies issued 1/1/97 and later. Since LTC insurance is age-rated, a new policy will cost you more since you older and you may not qualify medically for a new plan if you have developed a progressive health condtiion. You are allowed to own more than one LTCI policy so if you're not sure if you should replace an existing plan, you can always buy another one in addition to the one you have. An insurance professional can help you determine if replacement is in your best interest. If you decide to replace your current policy, make sure your new policy is in place first.
REPLACEMENT COST: In the event of a covered loss, a policy with replacement cost coverage will provide a dollar amount to repair damaged property or to replace it with new property of like kind and quality, without deducting for depreciation. If the home is insured properly, the policy will cover the full cost of replacing the damage to a home, up to the dwelling limit shown on the policy.
REPLACEMENT COST - PERSONAL PROPERTY: Pays full cost to repair or replace most personal property with no deduction for depreciation.
REPLACEMENT COST OR REPLACEMENT VALUE COVERAGE: Unlike the Actual Cash Value system in which an insurance payout for a wrecked car is based on the depreciated value of the car, this coverage provides you with a payout that will cover the cost to buy a new replacement vehicle. Essentially, this coverage protects you from depreciation. This coverage is only available for new cars and is typically renewable for four or five years. It is not available for leased cars.
RESIDUAL DISABILITY: A benefit payout if your disability only limits you to part-time work (rather than no work at all.) This partial benefit is known as residual disability coverage.
RESPITE CARE: Respite care pays benefits for temporary care you receive to provide time off for your primary, unpaid caregiver (such as your spouse or child). Costs of temporary care are typically covered for up to 21 days per year. Most policies cover respite care at home or in a facility, and many plans waive the elimination period so that your primary caregiver may receive help before your benefits start.
RESTORATION OF BENEFITS: This provision restores any benefits you have used if you become truly better for 180 consecutive days. "Truly better" means you no longer need help with two or more activities of daily living. Because of the expectation to need care for at least 90 days in order to get a claim paid in a tax-qualified policy, most people do not get better. However, you could have a severe accident and crush your pelvis for example, or suffer a moderate stroke. With months of the appropriate therapy (physical, speech, occupational, etc.) you may in fact get truly better. If you had used eight months of benefits out of a four year payout period, the eight months would be restored and you would once again have four years of benefits. In an individual policy, I would not pay more for this provision unless you are applying under age 60 as younger people have a better chance of getting better.
RETURN OF PREMIUM OPTION: If you purchase this option, all of the premium you paid over your lifetime will be returned to your beneficiary less any claims paid out. This option can increase your premium by 30% - 40%. I do not recommend this option because it is expensive and most consumers will not benefit from it as the odds for having a claim are high. A few policies allow you to pay even more premium; e.g. 50% to have the premium returned to your beneficiary even if you do collect benefits, but again, I don't recommend it. Before you buy a return of premium rider, make sure that you have purchased a meaningful daily or monthly benefit and especially be sure you have purchased a good inflation benefit, such as the 5% compound increases inflation option.
RETURN OF PREMIUM TERM (ROP): Term life insurance in which the insurance company returns the base premiums at the end of the policy's term. However in order to get full return of premium you have to keep the policy for the whole duration. For example, if you purchased a 20 year "ROP" policy and cancelled it 10 years later, you will not get a full return of your premium. How much you will get back if policy is cancelled early varies by the company. Generally, nothing is returned if "ROP" policy is cancelled within the first 6 years. This type of policy has a much higher premium.

S

SENILE DEMENTIA: This condition is a form of cognitive impairment that generally happens in people over the age of 65 and affects people’s memory and deteriorates intellectual capacity. To qualify for long-term care insurance benefits, this condition will require substantial and continuous supervision to protect patient and others.
SETTLEMENT OPTIONS: A beneficiary can request to receive the death benefit in one lump sum or they can choose to receive the benefit in periodic payments.
SEVERE COGNITIVE IMPAIRMENT: Deterioration in intellectual capacity and memory which may be caused by Alzheimer's disease, senile dementia or other mental disorders of organic origin. To qualify for long-term care insurance benefits, this condition will require substantial and continuous supervision to protect patient and others.
SHARED BENEFIT RIDER/PLAN: This policy option allows a couple to have access to each other's benefits instead of each paying for a longer payout period. The concept is that it's unlikely both will need care for a long time but it's impossible to know for sure which one will. Shared care means you don't have to know. This option is available in two different ways.

Some companies give each member of the couple a defined payout period, such as three years, but allow each partner to have access to the other's benefits if needed. It's common for policies to hold back at least one year of benefits for the healthy spouse or partner, but all of the remaining benefits can be used for the first one who needs benefits. Also, if one member of the couple dies, the surviving member inherits the remaining benefits of the deceased member. With the three year payout period example, the surviving partner would have six years of benefits if the deceased one had used no benefits. Other companies provide a third payout period of the same duration as the original payout period to use as needed, first come, first serve.

Note:All of these shared options cost additional premium, but they can be a really good alternative to paying the additional premium for a longer payout period. If two people have an age gap of more than 15 years, then a shared benefit rider may not be available as the older spouse/partner would more likely use up most of the benefits, leaving the younger one with very little coverage.
SHORT TERM DISABILITY (STD) POLICY: disability benefit payable for up to 12 months.
SIMPLE INFLATION PROTECTION: If you choose a 5% simple inflation protection option, your daily or monthly benefit amount and personal benefit account will grow each year by five percent of your policy's ORIGINAL benefits. At this rate, your benefits will double in 20 years. I recommend this option only for people over age 70. Under age 70, I recommend the 5% compound increases inflation option which will make your benefit double in 15 years. Work with an insurance professional to determine the best inflation option for you. However you get there, remember that the cost of long-term care is expected to triple in about 20 years if historical inflation trends continue, which is an annual growth rate of between 5-6%.
SINGLE LIMIT: The amount of liability coverage on a policy that combines the coverage for bodily injury and property damage into one comprehensive dollar limit. That single dollar amount is the maximum amount a policy will pay out for any and all damages in a single accident. For example, if an insured purchases a $100,000 single limit policy (also known as $100,000 CSL) and is found liable for an accident resulting in $20,000 in injuries to one person, $70,000 to another person and $40,000 in property damage to the vehicle these people were riding in, the maximum the insured's insurance company will pay will be $100,000, even though total injuries and property damage is $130,000.
SKILLED NURSING CARE: This is care that only a licensed nurse is qualified to provide such as changing dressings in the case of a wound or pressure ulcer or giving injections. Health insurance and Medicare pay for this type of service as long as it is justified by your doctor. If your health insurance provider or Medicare decide not to pay for it, your long-term care insurance plan will pay for it at home, if you purchased home health care benefits and you meet the benefit trigger required by your policy. Otherwise, you can receive skilled nursing care in a skilled nursing facility, which is covered by a LTCI policy.
SKILLED NURSING FACILITY: Facilities licensed under the laws of jurisdiction where they are located and provide skilled or non-skilled care (also called custodial care) on an inpatient basis. Services are provided 24 hours a day, under the supervision of a registered nurse (R.N.), licensed vocational nurse (L.V.N.) or licensed practical nurse (L.P.N.). A daily medical record is kept of each patient residing at the facility. A skilled nursing facility may be part of a hospital or a standalone facility.
SKILLED SERVICES: These services are services provided by a licensed professional, such as a licensed nurse who can dress a pressure ulcer (bed sore) or the services of a licensed therapist, such as a therapist who provides physical, occupational, respiratory or speech therapy. They can be paid by long-term care insurance after health insurance or Medicare stop paying, if they fit within your health care practitioner's recommended Plan of Care for you.
SOCIAL INSURANCE SUBSTITUTE BENEFIT: This rider will pay you a disability benefit if Social Security, state disability, worker’s compensation etc will not pay.
SOCIAL SECURITY SURVIVOR BENEFITS FOR CHILDREN: Your unmarried children who are under 18 (up to age 19 if attending elementary or secondary school full time) can be eligible to receive Social Security benefits when you die. Also, your child is eligible for benefits at any age if he or she was disabled before age 22, and remains disabled. Besides your natural children, your stepchildren, grandchildren or adopted children may receive Social Security benefits under certain circumstances.
SOCIAL SECURITY SURVIVOR BENEFITS FOR WIDOW OR WIDOWER: If you are the widow or widower of a person who worked long enough under Social Security, you can: * Receive full benefits at full retirement age for survivors or reduced benefits as early as age 60. * Begin receiving benefits as early as age 50 if you are disabled. * Receive survivor's benefits at any age if you take care of the deceased worker's child who is under age 16 or who is disabled and receives benefits on the worker's record. Note: You can not receive benefits based on your deceased spouse's record, if you remarry.
SPECIAL LIMITS OF LIABILITY: Home, condo owners and renters policy all have maximum limits the company will pay for loss to specified types of property (these limits can vary among companies.)

Regardless of the personal property limit shown on a policy, it is important to know that within this limit for personal property, your policy also contains a smaller, set amount for certain types of property. For example the limits below are some of the more common sub limits or "special limits of liability" in a policy.
SPENDTHRIFT CLAUSE: This provision protects policy proceeds from the claims of the creditors of the beneficiary. Creditors of the beneficiary cannot put a lien against the policy. The insurance company will pay death proceeds directly to the named beneficiary. Generally speaking, most life insurance policies have this clause.
SPLIT LIMIT: A three-figure representation of the liability and property coverage of your policy. For example, a recommended split level coverage is 250/500/100.
The first number indicates the maximum amount or "per person" the insurance company will pay to any one person injured in an accident, in this case, $250,000. The second number is the total amount "per accident" the insurance company will pay for all bodily injuries as a result of an accident. In this example the max is $500,000 per accident. The third number is the total amount the insurance company will pay for all property damage in an accident. In the case of 250/500/100 the property damage maximum coverage is for $100,000.
STATE DISABILITY: State law in California, Hawaii, New Jersey, New York and Rhode Island requires most employers to offer short term disability income benefit. Hawaii, New Jersey and New York require disability benefits be paid for up to 26 weeks, Rhode Island for up to 30 weeks and California for up to 52 weeks.
STATED AMOUNT COVERAGE: The insurer and insured agree upon a maximum value on the vehicle at the beginning of the policy period. An appraiser is the customary method used to determine value This coverage is offered by some insurance companies and is generally appropriate for older, restored vehicles whose values are higher because of restoration.
SUICIDE CLAUSE: If the insured whether sane or insane commits suicide in the first two years of the policy, the insurance company would not pay the claim. However, normally the insurance company will refund the premium paid during that period.
SURCHARGE: An insurance company will increase an insured's policy premium if they are found to be 51% or more responsible for an accident and there is more than a specific total amount of damages (this amount varies by state). The insurance company will also increase a policy premium if the insured is convicted of or required to pay a fine for a traffic law violation. The additional premium is called a surcharge and the increase will be seen at the next policy renewal.
SURVIVOR: A feature that waives the premium on a surviving spouse/partner as long as both paid premium at least ten years before one dies. If one dies before ten years, a couple of policies have allowed the survivor to pay premium until the 10th year then stop paying. This survivor feature usually costs about 9% additional premium.

T

TAX ADVANTAGES OF LIFE INSURANCE

Under current tax laws, generally the proceeds from the life insurance policy are free of federal income tax.

TAX QUALIFIED (TQ) PLANS

Long-term care insurance policies purchased January 1, 1997 on that meet certain definitions established by the Health Insurance Portability and Accountability Act of 1996, are called tax-qualified (TQ) policies and they enjoy certain tax advantages.

1) An age-based amount of premium can be deducted as a medical expense if out-of-pocket eligible medical expenses exceed 10% of adjusted gross income OR paid pre-tax out of a health savings account OR deducted first-dollar as part of the self-employed health insurance deduction for sole proprietors, Partnerships, LLCs and greater than 2% owners of an S-Corporation.. The age-based amounts for 2017 per person as defined in IRS Rev. Proc. 2016-55 are: 40 or less $410; 41-50 $770; 51-60 $1,530; 61-70 $4,090; $71+ $5,110.

A C-Corporation can deduct 100% of the premium just like health insurance for owners, employees and respective spouses.

2) Benefits paid under tax-qualified Long-Term Care insurance policies up to the allowable limit are tax-free. In 2017 any benefit payment received up to $360 per day/$10,950 a month (this amount is adjusted for inflation each year) or actual expenses if greater is tax-free. However, if you receive a benefit payment that is higher than $360/day and your actual expenses are less, the amount above $360/day will be taxable income to you. For example, if you received $380/day in a benefit payment but your actual expenses were only $330/day, the difference of $20 will be taxable income ($380 - $360 = $20).

To qualify for benefits under a tax-qualified plan, you must meet one of two conditions: The first condition is to be expected to need help with at least two of six activities of daily living (ADL's) for at least 90 days. In order to function normally, most of us need to be able to (1) feed ourselves; (2) clothe ourselves; (3) transfer ourselves (get in and out of bed, chairs, and the like, unattended); (4) be continent; (5) use the toilet; and (6) bathe ourselves. With a TQ policy, if you got to a point
in your life where you could not perform any two of the qualifying ADL's without substantial assistance and it was expected that you would be that way for at least 90 days, then you would qualify for benefits.

The second condition is severe cognitive impairment, which simply means that you qualify if you develop, say, Alzheimer's disease or cannot
think or act clearly and therefore become a danger to yourself or others. A health care practitioner must certify to the insurance company that you meet one of these two ways to trigger the benefits. This person can be a physician, a Registered Nurse or a Licensed Social Worker. This professional can also work with the insurance company to develop a 12 month Plan of Care as that is necessary in order for benefits to start.

THERAPIST (PHYSICAL, SPEECH, OCCUPATIONAL AND RESPIRATORY)

These licensed professionals are trained to provide physical, speech, occupational or respiratory therapy. Medicare and health insurance cover these skilled services for a short time. When Medicare or health insurance stop paying, long-term care insurance can continue to pay for these services up to the maximum daily or monthly benefit as long as they fit within the Plan of Care recommended for you by your licensed health care practitioner.

THIRD PARTY

An individual other than the policyholder or the insurance company who has suffered a loss and may be able to collect compensation under the policy due to the negligent acts or omissions of the policyholder.

THIRTY-DAY (30 DAY) FREE LOOK

This policy provision states that if you're not satisfied with the policy for any reason after receiving it, you can return the policy to the insurer within 30 days for a full refund, no questions asked.

TOTAL LOSS

Damage or destruction to an automobile to such extent that it cannot be rebuilt or repaired to its condition prior to the loss or when it would be cost prohibitive to repair or rebuild in comparison to the value of the automobile prior to the loss.

TOWING COVERAGE (INCLUDES ROADSIDE SERVICE)

This coverage can be added to most automobile policies and generally pays a specified amount for towing and related labor costs. With towing coverage added to an auto policy, the insurance company will pay reasonable expenses, up to a specific amount, incurred for:

towing the insured's vehicle to the nearest place where necessary repairs can be made during regular business hours
towing the insured's vehicle if it is stuck on or next to a public street or highway
providing mechanical labor up to one hour at the place of the vehicle's breakdown
changing of a tire on the vehicle
delivering gasoline, oil or loaned battery to an insured vehicle, but typically not the cost of these items

U

UMBRELLA: Provides liability coverage over and above the liability and property damage limits of your home and auto policies. An umbrella policy payout kicks in once you reach the policy limits of your standard home and auto insurance. Umbrella coverage can be purchased as an additional policy or as an endorsement to a home/renter/condo or auto policy, depending on the insurance company. There is also the option of purchasing a completely separate umbrella policy through an insurer who provides this coverage independently.
UMBRELLA LIABILITY COVERAGE: Provides liability coverage over and above the liability and property damage limits of your home and auto policies. An umbrella-policy payout kicks in once you reach the policy limits of your standard home and auto insurance. Umbrella coverage can be purchased as an additional policy or as an endorsement to a home/renter/condo or auto policy, depending on the insurance company. There is also the option of purchasing a completely separate umbrella policy through an insurer who provides this coverage independently.
UNDERINSURED MOTORIST BODILY INJURY: If another driver causes an accident and their insurance does not cover your full claim amount, your own underinsured motorist bodily injury coverage will take over.
UNINSURED MOTORIST BODILY INJURY: This coverage will pay for damages that the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury. An uninsured motor vehicle may include a hit and run vehicle; or a vehicle, which is not insured at the time of loss. The definition of an uninsured motor vehicle may differ depending on the state in which an insured resides. Without uninsured motorist coverage, a person has little likelihood of gaining payment for damages for themselves or passengers, if they are involved in an accident with a driver who is uninsured.
UNINSURED MOTORIST PROPERTY DAMAGE: This coverage may be included under the uninsured motorist coverage or be separate. If the insured vehicle has collision coverage, this coverage will waive all or portion of the collision deductible. If the insured vehicle is not covered by collision, limited coverage may be available.

V

VALUABLES AND COLLECTIONS: Any expensive Valuables and Collectibles you own may not be fully covered by the general provisions of your home or condo insurance. Most policies include “special limits of liability” which limit the insurance company’s payout for any damages or losses to possessions such as jewelry, money, silverware, watercraft, business, personal property, etc. To fully insure specific valuable items, you can add a personal article floater, sometimes known as a rider, to your policy.
VIATICAL SETTLEMENT: This is another expensive option used almost exclusively by people who are terminally ill. A viatical company will pay you part of the cash value of your whole life insurance policy while you are still alive in exchange for ownership of your policy. They will continue to pay your premiums and they will collect the full benefit after you die. This is a good option if you really need the cash, but it means that you are selling your policy for less than it is worth. It also means you are not leaving your death benefit to the loved ones whom you purchased the policy to protect.

W

WAIVER OF COLLISION DEDUCTIBLE: Under this coverage, the insured's collision deductible will be waived in the event of an accident involving an uninsured motor vehicle.
WAIVER OF PREMIUM: This policy provision states that once you begin to receive benefits under your policy, you won't have to pay premiums for the duration of the care. It is important to check to see if there is a stated period of time for you to be receiving benefits before this waiver goes into effect. Some policies provide an option for little cost to have the premium stop on the healthy spouse or partner as well. The premium will come back if the sick spouse or partner either recovers or dies unless the couple also purchased the survivor option. This feature gives the surviving spouse or partner a paid-up policy as long as both paid premium at least ten years before one dies. If one dies prior to 10 years, a couple of policies will allow the survivor to pay the rest of the 10 year period, then have a paid-up policy for life. The survivor feature usually adds about 9% to the premium.
WAIVER OF PREMIUM: Once you become disabled, this rider to your policy will allow you to receive benefits without having to continue paying your premium.
WEEKLY BENEFIT: Generally insurance companies under the pool of money/reimbursement type policies reimburse for expenses based on the daily benefit amount. Some companies will offer an option for an extra premium, to select reimbursement on a weekly (or monthly) benefit basis. If you select the benefits reimbursement on a weekly basis, it gives you some flexibility in how you use the available dollars. For example, if your daily benefit amount is $100, then your weekly benefit amount will be $700 ($100 Daily benefit amount x 7 days in week). You can use $700 in one day or throughout the week. For even more flexibility, you should consider a policy that reimburses based on a monthly benefit. For example, if your daily benefit amount is $100, then you monthly benefit amount will be $3,000 ($100 Daily benefit amount x 30 days in month). You can use the dollars in a few days or throughout the month. However if an insurance company only gives you the option of a daily benefit amount, and your expenses for any given day exceed that amount, then the difference would be paid by you.

For example, you could need care on a particular day for a substantial number of hours at a cost that would exceed your daily benefit. Or, you could need services from a home health aide and a therapist (occupational, physical or speech) in addition to homemaker or home health aide services. The cost of these combined services could easily exceed your daily benefit. If your policy reimburses on a weekly or monthly benefit amount basis, you will have more flexibility and may not have to pay for any expenses out of your pocket. Some plans only offer monthly benefits and no extra premium is needed for this flexibility.
WORKERS COMPENSATION: All states require employers to provide workers compensation coverage to most of their employees. Worker's compensation protects you if you are injured while performing your job. The size of your benefit varies by the state and may not be enough to meet the needs of an employee. One should not rely exclusively on workers compensation to fulfill their disability income need due to its limited benefit, and the fac that it does not cover any disabilities that occur outside of your job.

Y

YOU: The individual or individuals protected by the insurance policy. you is also referred to as a policyholder.