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LONG TERM CARE INSURANCE (LTCI)
Transfers the financial risk of the cost of caring for an individual who cannot live independently. Is Medically underwritten
LONG TERM CARE INSURANCE (LTCI) is important because:
1. Medicare provides no Custodial Care (aka Personal Care)
2. Medicaid requires impoverishment before providing nursing home LTC benefits.
3. Medical Expense Insurance provides NO long term care benefits.
4. Long Term Care is expensive.
LTCI Insuring Agreement
The coverage trigger is either
1. Cognitive Impariment
- 2. Inabality to perform two(2) or more "Activities of Daily Living"
- ** NO prior hospitalization is required**
LTCI Policy Coverage Selections
- 1. Daily Benefit Amount
- 2. Benefit Period
- 3. Elimination Period
- 4. Level of Care
Daily Benefit Amount
- Fixed daily benefit
- Insurer makes payment on a reimbursement basis.
- Inflation Protection must be offered- based on policy the benefit amount increases automatically on a systematic basis.
- Benefits are paid on a daily basis.
Must provide coverage for a minimum of 12 months to be called a LTC policy under the Lonf Term Care Insurance Act.
Typical benefit periods 2,3,4,5 years or lifetime.
A time period deductible.
Insured must be eligible for benefits for a certain period of time before LTC benefits begin.
Level of Care
- Skilled Nursing Care (aka Skilled Care)
- Custodial Care (aka Personal Care)
Skilled Nursing Care
Nursing and rehabilitation care under the supervision of skilled medical personnel, i.e. registered nurses AND based on a physician's orders.
- Can be provided in :
- Nursing Home
- Assisted Living Center
- Insured's Home
Help in one's daily activities.
Do not need to be medically skilled but the care is usually based on a physician's certification that the care is needed.
Purpose of Oklahoma Long Term Care Insurance Act
- Protect consumer from unfair or deceptive sale practices
- Establish minimum standards of coverage
- Must be either guaranteed renewable or non-cancelable
- cannot be cancelled or non-renewed because of age, or deterioration of mental or physical health of the insured.
- Pre-existing condition cannot last longer than 6 months after the policy effective date
- Minimum of a 30 day Free look
- Inflation Protection minimum amount 5%
- Coverage must provide both 1)skilled nursing and 2) Personal care
- The policy must be delivered to the policy owner no later that thirty(30) days after the date of approval
Outline of Coverage
At the time of initial solicitation, an outline of coverage shall be delivered to a prospective applicant.
- Must Include
- Description of principal benefits and coverage provided
- A statement of principal exclusions or limitations
- A description of the terms in which the premium can be refunded
- A description of the relationship between cost of care and benefits
- Whether the policy is intended to be a "qualified" long term care insurance contract
- A statement that the Outline of Coverage is a summary only and not a contract
Long Term Care Exclusions Allowed
- Self inflicted including attempted suicide, alcohol or drug addiction related
- Illegal activities including participation in a felony
- Services provided by a government hospital or Medicare
- Services provided by a covered person's immediate family
- Mental or nervous disorders
**Alzheimer's must be covered without preexisting conditions**
Premium Taxation of Long Term Care Insurance Policy
- Health Insurance Portability and Accountability Act (HIPPA)
- Premiums paid are deductible
- Benefits received are tax free