Table of Contents

Long Term Care Fundamentals. i

Course Learning Objectives. v

Introduction to the Course. v

Chapter 1- The Nature of Long Term Care. 9

Chapter Learning Objectives. 9

Key Points. 9

Introduction. 10

Long Term Care Defined. 10

Activities of Daily Living. 10

Cognitive Impairment 12

Typical Conditions Requiring Long Term Care. 12

Role of Increased Life Expectancy. 13

Types of Long Term Care. 13

Settings in Which Long Term Care is Provided. 14

Nursing Homes. 15

Nursing Home Services. 15

Nursing Home Size. 16

Alternate Care Facilities. 17

Assisted Living Facilities. 17

Alzheimer’s Facilities. 18

Special Alzheimer’s Facility Considerations. 19

Custodial Care Facilities. 21

Community-Based Care Services. 21

Home Health Care. 22

Adult Day Care Services. 22

Respite Care. 24

Hospice Care. 24

Informal Care. 26

Likelihood of Requiring Long Term Care. 26

Social and Demographic Factors Affecting Long Term Care. 28

Industrial Revolution Splits Families. 28

Family Relocation to Achieve Professional Advancement 28

Emergence of the Dual-Income Family. 29

Summary. 29

Chapter 1 Review Questions. 31

Chapter 2 - Long Term Care Costs. 32

Chapter Learning Objectives. 32

Key Points. 32

Introduction. 33

Nursing Home Costs. 33

Skilled Care. 33

Custodial Care. 34

Assisted Living Facility Costs. 35

Community-Based Professional Care Costs. 36

Home Health Care Costs. 36

Adult Day Care Facility Costs. 36

Service. 37

Population Trends Affecting Long Term Care. 37

The Baby Boom Generation’s Health Issues. 37

Census Bureau Projections. 38

30-Year Population Changes. 38

U.S. Census Projections. 39

Long Term Care Cost Payers. 40

Medicare. 41

Medicare Supplementary Insurance. 42

Medicaid. 43

Long Term Care Payer by Type of Service. 43

Hospice Care. 43

Home Health Care. 44

Short-Term Institutional Care. 45

Nursing Home Custodial Care. 46

Summary. 47

Chapter 2 Review Questions. 50

Chapter 3 - Long Term Care Insurance. 51

Chapter Learning Objectives. 51

Key Points. 51

Introduction. 53

Long Term Care Insurance Approaches. 53

Pool of Money Concept 54

Specified Daily Benefit Amount & Benefit Period. 54

Indemnity Provisions. 54

Reimbursement Provisions. 55

Benefit Triggers. 55

Inability to Perform ADLs. 55

Impairment in Cognitive Ability. 56

Medical Necessity. 56

Basic Long Term Care Insurance Policy Provisions. 57

Benefit Period. 57

Elimination Period. 58

Premium Payment Grace Period. 59

Lapse and Reinstatement of Coverage. 59

Free-Look Period. 60

Renewability. 60

Non-Duplication of Benefits. 61

Coordination of Benefits. 61

Incontestability. 62

Shared Coverage. 63

Lifetime Maximum is Shared. 63

Shared Waiver of Premium.. 63

Death of One of the Insureds. 64

Divorce or Separation of the Couple. 64

Basic Policy Benefits. 65

Long Term Care Benefits. 65

Alternative Care Benefits. 65

Respite Care Benefit 67

Care Advisory Services Benefit 67

Waiver of Premium.. 68

Extension of Benefits. 68

Return of Premium Benefit 68

Bed Reservation Benefit 69

Survivorship Benefit 69

International Coverage Benefit 69

Exceptions and Exclusions. 70

Optional Benefits. 71

Inflation Coverage Benefits. 71

Purchase Option Rider 74

Nonforfeiture Benefit 75

Shared Partner Benefit 77

Family Care Optional Benefit 78

Restoration of Benefits. 78

Survivorship & Waiver of Premium Benefit 78

Waiver of Elimination Period for Home Care Benefit 79

Additional Cash Benefit 79

Return of Premium Benefit 80

Tax Treatment of Long Term Care Insurance. 80

HIPAA Clarifies Tax Treatment for Tax-Qualified Policies. 81

Favorable Tax Treatment only for Chronically-Ill 81

Tax-Qualified Long Term Care Premiums Deductible within Limits. 82

Tax Treatment of Nonqualified Long Term Care Insurance Policies. 83

Alternatives for Paying Long Term Care Costs. 84

Accelerated Death Benefits. 84

Viatical Settlements. 85

Long Term Care Funds from Annuity Contracts. 87

Crisis Waivers. 87

Long Term Care Insurance Riders on Annuity Contracts. 87

Integrated Long Term Care/Annuity Benefits. 88

Long Term Care Funds from Life Insurance Policies. 89

Integrated Life Insurance-Based Long Term Care. 89

Long Term Care Insurance Riders on Life Insurance Policies. 90

Summary. 90

Chapter 3 Review Questions. 94

Chapter 4 - Suitability & Ethical Issues. 95

Chapter Learning Objectives. 95

Key Points. 95

Introduction. 96

Suitability. 96

Long Term Care Suitability Considerations. 96

NAIC Suitability Tests. 96

Evaluating the Client’s Financial and Personal Situation. 98

Evaluating the Coverage. 99

Evaluating the Insurer 100

Ethical Issues. 101

Disclosure. 101

Replacement 101

Replacement Suitability. 102

Replacement Disclosure. 103

Summary. 103

Chapter 4 Review Questions. 106

Answers to Chapter Quizzes. 107

Chapter 1 Review Questions Feedback. 107

Chapter 2 Review Questions Feedback. 111

Chapter 3 Review Questions Feedback. 114

Chapter 4 Review Questions Feedback. 117

Glossary. 120

References. 126

Final Examination. 128

CPASelfstudy.com Course Evaluation. 133