Final answer:
The statement that an individual must be classified as terminally or chronically ill to receive LTC insurance benefits is true. LTC insurance is meant to assist those who can't live independently due to serious health conditions. Eligibility definitions can vary, but typically require a chronic or terminal illness diagnosis.
Step-by-step explanation:
The statement that an insured individual must be classified as either terminally ill or chronically ill to receive benefits under a LTC insurance policy is generally true. Long-term care (LTC) insurance policies are designed to cover services that support individuals who are unable to perform basic activities of daily living or who suffer from a severe cognitive impairment. The definition of eligibility can vary by policy, but typically requires the policyholder to have a chronic condition or a terminal illness that limits their ability to live independently.
Understanding the mechanics of health care exchanges and the concept of risk pools is crucial. A healthy ratio of healthy people to sick people is necessary so that the funds are not disproportionately consumed by a few, leading to escalated costs for all. Historically, to maintain a stable risk pool and avoid the so-called insurance death spiral, companies would often deny coverage to those with pre-existing conditions, though such practices have changed with recent health care reforms.
In managing chronic and terminal illnesses, the responsibilities of the sick person include seeking competent medical help and trying to recover, unless they are in the end stages of a terminal illness where palliative care may be more suitable. The decision whether to opt for hospice care or hospital treatment in case of a terminal illness is personal and depends on one's wishes for end-of-life care.