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14 Longterm care insurance 14.1 Definition and use to meet customers needs The contract can be used to help provide financial security against the risk of needing either home or nursinghome care as an elderly person, ie postretirement. The contract could pay for all the costs of care throughout the remainder of life an indemnity contract, or could provide a cash lump sum, or an annuity, to contribute towards the costs of care. A claim is payable on this contract when the policyholder is deemed to have reached a specified level of disability. For example, the policyholder may be unable to perform a specified number of activities of daily living ADLs due to physical impairment, or may not be able to perform them unsupervised due to mental impairment. The different levels of care will differ between one contract and another, but typically may include cost of care in own home, cost of being cared for in a residential but nonnursing home, cost of being cared for in a residential nursing home. These involve increasing costs as we move down the list. The contract can be paid for by single or regular premiums, and all types of benefit structures withoutprofit, withprofit, unitlinked and investmentlinked are possible. Obviously any regular premiums would cease from the point at which claims begin to be paid if not at some earlier date. 14.2 Existence of a group version A group version of the contract would enable an employer to provide longterm care cover to employees and their spouses and parents. Retirement communities, which were mentioned in an earlier chapter, are another example of a group version of longterm care provision.