Question 1

What is long term care? (7) What kind of patients/individuals is long term care essentially targeted towards? (1)

Accepted Answer

Description of long term care Long term care is all forms of continuing personal care or nursing care and associated domestic services... ...for people who are unable to look after themselves without some degree of support, whether provided in their own homes, at a day centre, or in a state sponsored or care home setting Intended LTC is essentially for/targeted towards people who are not going to get better.

Question 2

Describe how long term care (LTC) is distinct from acute medical care (1) What are the main aims of LTC? (1) What are some of the optimal desired outcomes from LTC? (3) Comment on the importance of medical care in the context of providing LTC (1)

Accepted Answer

LTC is distinct from acute medical care, as it is not principally concerned with curing or alleviating particular medical conditions Long term care aims to treat the result of the condition, not the condition itself eg for patients/individuals who've developed a condition that leads to reduced ability to going to bed, washing, personal care, cooking meals, LTC would help such individuals regain enough strength/mobility to be able to do the above activities again...but LTC would not treat the condition leading to said mobility restrictions in the first place. Ideally we want LTC to help individual regain independence slow down deterioration in health provide necessary care support and environment Medical care also important aspect of long term care, where physical/mental breakdown requires doctors/nursing staff. Usually expensive!

Question 3

Describe a long term care insurance contract (7)

Accepted Answer

Long-term care insurance is a product providing a benefit to the insured... ....to help cover the additional costs of day-to-day living from needing long-term care... ...due to qualifying events under terms and conditions of their policy. The benefit given under a long term care insurance product may either be a cash benefit, or a benefit to indemnify the insured In order to control costs there may be limits on payments. In this case the policy does not provide full-indemnity

Question 4

Describe some customer needs which may be met by a long term care insurance product (12)

Accepted Answer

An optimal long-term care programme helps people regain as much independence as possible, slow down the rate of deterioration and provide necessary care support and environment to maintain wellbeing. Additional customer needs met by long term care insurance products include Finance provision of care/assistance (in old age) Financial protection (when a person becomes unable to look after self) Protect from insufficient funds/inadequate state care Avoid dependence Provide comfort (for insured, for insured's relatives/family) Generally doesn't indemnify Helps protect against uncertainty associated with state provided cover Inflation protection of care costs (if indemnity) Advice on care

Question 5

Describe the 3 types of costs associated with long term care (3, 5)

Accepted Answer

Costs can be related to 1. ​living: 1. food, clothing, heating, amenities 2. may require special arrangements, and increased cost impact 2. housing: rent, mortgage payments, council tax 3. personal care: 1. added costs of being looked after/which involves having one's body touched =\> issues surrounding intimacy/personal dignity/confidentiality 2. nursing care: needs knowledge/skills of qualified nurse 3. intermediary care: focusing on recuperative services acute event (e.g. heart-attack) to reduce hospital admission/minimise dependence on ongoing care

Question 6

Briefly list the 2 main ways in which long term care may be provided, in terms of who the providers of care services are, and how qualified these providers are (4)

Accepted Answer

Formal care ​Nursing care Intermediate care Informal care

Question 7

What do we mean by 'formal care'? (4) Give 2 means through which formal care may be provided (2)

Accepted Answer

Formal care is ...care provided via professional services either in... own home homes near relatives managed residential homes Formal care may be provided in the form of nursing care intermediate care

Question 8

Describe what we mean by 'nursing care' as a means of 'formal care'

Accepted Answer

Formal care provided via nursing care is the narrowest form of long-term care and can be defined as care that requires the specific knowledge or skills of a qualified nurse. At its most restrictive this would require technical assessment of healthcare needs and specific interventions that require technical competence and knowledge of disease states, which only a nurse could provide. Broader definition might cover costs of registered nurse in providing or supervising care in any setting.

Question 9

Describe what we mean by 'intermediate care' as a means of 'formal care' (5)

Accepted Answer

Intermediate care focuses on recuperative services... ...following an acute event (eg heart attack, a stroke or an accident) in order to reduce avoidable hospital admission, and minimise ongoing long-term care. The services should incorporate intensive therapy and support.

Question 10

What do we mean by 'informal care'? (8) What factors often influence the provision of formal care? (5)

Accepted Answer

What do we mean by informal care? Care typically provided by spouses/family/relatives,... ...not provided via professional services,... ...may be limited to no more than 4 hours per week... ...as a smaller group provides substantial levels of personal care/practical help Often carries indirect cost in terms of lost economic activity, or price of replacing the care support should it no longer be provided It should be noted that many of those provision substation levels of care are themselves over age 60. - If the informal care sector shrinks then the demand for insurance products may increase. ​Factors influencing formal care Cultural/religious practices Attitude towards caring for older generation Geographic family dispersion Family structure changes (divorces, re-marriage, lower birth rates) Proportion of working women

Question 11

What are the 2 main types of long term care contracts? (3) (in terms timing of funding/paying premiums compared to timing of when benefits are paid)

Accepted Answer

Pre funded long term care contracts purchased by relatively healthy people to protect them against risk of future disability/morbidity something else worth noting: because these contracts provide for future disability, a claims trigger will need to be met to pay benefit in future. This is not the case for immediate needs long term care contracts Immediate needs long term care contracts purchased by people already in a state of "needing long term care", and needing to protect against uncertain survival duration in that state

Question 12

Pre funded long term care contracts: discuss the following: structure, in terms of the 'policy being sold by itself' vs 'the policy being sold in addition to other policies' (5)

Accepted Answer

Structure may either be: Standalone: this is the case most of the time Rider: CI: When added to CI, the policy TPD definition for claims may change at age 60 from "occupation based" to "loss of independent existence" i.e. failure of certain number of ADLs IP: cover annuities beyond NRA, defs changes from occupation based to activity based PMI: ? Accelerator: Whole of life: fixed % of sum assured being accelerated when LTC claim definition is satisfied

Question 13

Pre funded long term care contracts: discuss the following funding/financing for the care required by the policyholder...ie premiums payable (4)

Accepted Answer

Funding/premiums for pre funded long term care insurance: Usually funded by a single premium May be funded by regular premiums, which usually increase with chosen benefit increase rate may be level Regular premiums paid may be restricted: up to certain age eg NRA (normal retirement age) non during specified level of disability e.g. waiver of premium Payment for the product may be funded retrospectively: equity release after sale of home

Question 14

Pre funded long term care insurance premiums: guaranteed terms Discuss guarantees/reviewability of premiums for pre-funded long term care insurance products (4)

Accepted Answer

Long-term care insurers may provide both guaranteed and reviewable products. Older people with fixed incomes may choose these options because they cannot afford an additional premium or a reduced benefit after review Insurers recognise that for ages 70 to 75 the effectiveness of reviewing is limited and therefore the guarantee has less significance. Guaranteed premiums will include a substantial loading compared to reviewable premiums, in order to protect against adverse future experience.

Question 15

Pre funded long term care contracts: Discuss claims definitions (2) Claims trigger requirements (3)

Accepted Answer

The benefit payment is dependent upon the claim definition, which may be triggered by a single event or by a multiple set of events. The single event may be dependent a level of disability and its continuation for a specified period. Claims trigger requires insured incapable perform certain number of activities without endangering health/wellbeing of themself or others usually: failure of insured to undertake certain number of ADLs unaided some restrictive plans may require all of the events to be triggered before a payout.

Question 16

How might an insurer determine when the benefits on a pre-funded LTCI plan are triggered?

Accepted Answer

Many of today's pre-funded LTCI products use activities of daily living (ADLs) and cognitive (ie mental) impairment as the claims trigger to measure dependency. The number of ADLs failed denotes the level of dependency. If, for example, two of six specified ADLs are failed, then 50% of the benefits may be paid, and if three or more of six ADLs are failed, then 100% of the benefits are paid. The amount of the benefits payable is sometimes also dependent on residence (whether in a nursing home, the policyholder’s own home or a hospital).

Chapter 3 Long-term care insurance Flashcards

Describe the main types of health and care insurance contracts. -lng-term care insurance -main example variations of contracts issued.

Brainscape's Knowledge GenomeTM

Chapter 3 Long-term care insurance Flashcards

Describe the main types of health and care insurance contracts. -lng-term care insurance -main example variations of contracts issued.

Brainscape's Knowledge Genome^TM