Long-Term Care Insurance

Long-Term Care (LTC) Insurance

Insurance that provides coverage for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided outside an acute care hospital.

What does LTC insurance cover?

Nursing homes, skilled nursing facilities, custodial care, home health care, personal care, hospice, respite care, adult day care, and community-based care.

What does LTC insurance NOT cover?

Medicare expenses or major medical expenses.

Three ways LTC coverage can be issued

Individual policy, group policy, or rider/endorsement to a life insurance policy or annuity.

What does Medi-Cal require for long-term care eligibility?

Income/resource qualifications, spend-down requirements, and possible estate recovery.

Skilled Care

Daily nursing and rehabilitative care provided by licensed medical personnel under physician direction.

Intermediate Care

Occasional nursing or rehabilitative care for stable conditions requiring less frequent medical attention.

Assisted Living

A setting that provides help with nonmedical daily activities while allowing residents to live more independently.

Respite Care

Care designed to provide relief to family caregivers.

What are the 6 ADLs?

Eating, Bathing, Continence, Dressing, Toileting, Transferring.

Continence ADL

Ability to control bowel and bladder.

Benefit Trigger

Criteria that must be met before LTC benefits become payable.

Tax-qualified LTC benefit trigger

Unable to perform 2 of 6 ADLs or has severe cognitive impairment.

What assistance level qualifies as impaired?

Substantial supervision or hands-on assistance.

Tax-qualified LTC benefit requirements

Covers qualified LTC services, is guaranteed renewable, excludes Medicare-covered expenses, and meets consumer protection requirements.

Chronic illness period for tax-qualified LTC

Expected to last at least 90 days.

California Partnership for Long-Term Care purpose

Allows individuals who exhaust LTC benefits to qualify for Medi-Cal while protecting assets.

Partnership LTC benefit

Assets may be protected from Medi-Cal spend-down and estate recovery.

Training required to sell Partnership LTC policies

8 hours general LTC training + 8 hours California Partnership training.

Most LTC policies pay benefits how?

A fixed dollar amount per day.

Guaranteed Renewable

The insurer must renew coverage but may increase premiums.

When can LTC coverage terminate?

Nonpayment of premium.

Long-Term Care Insurance Personal Worksheet

A worksheet showing premium information and rate increases.

Prohibited LTC policy limitation

Policies cannot limit benefits only to skilled nursing facilities.

Can LTC policies use “usual and customary” benefit language?

No.

Can LTC replacement create a new waiting period?

No, except for increased benefits.

How long must LTC advertisements be retained?

3 years

How early must LTC advertisements be submitted to the Commissioner?

30 days before use

Suitability standard

Requirement to determine if LTC insurance is appropriate for the applicant.

Unnecessary LTC replacement is prohibited when:

It decreases benefits and increases premiums.

Third LTC policy sold within 12 months is considered:

Automatically unnecessary replacement.

First 4 years after LTC license issuance

8 hours of LTC training annually.

After first 4 years

8 hours of LTC training every 2-year license term.