If we think of nursing homes as generally providing care at the highest level of institutionalization for an individual and home care as providing the least, assisted living facilities (ALFs) can be reasonably placed between the two. Accordingly, assisted living facilities are generally sought out for individuals who don’t require the more intensive care that may be provided by nursing homes but who still require assistance in day-to-day living.

The typical assisted living facility provides residents with the management and monitoring of their care and medication, assistance with ADLs, laundry and housekeeping services, security, transportation, and recreational activities. All of these services are normally included in the base ALF rate. In addition to these basic services, an ALF may also offer other services at a fee. Additional charges may be levied for special services such as delivering meals to residents’ living quarters, providing additional transportation services, and for dementia care. In addition to these basic and additional fees, some ALFs charge a one-time entrance fee.

The monthly ALF costs shown below are monthly private pay base rates for a private room with a private bath and include:

• room and board
• two or more meals daily
• housekeeping
• personal care assistance

In 2010, the national average, private pay monthly base rate for a care recipient in an ALF was $3,293, or $39,516 each year. Just as was noted above with respect to nursing home costs, the monthly rates for assisted living facilities ranged substantially by region from $2,073 (Arkansas) to $5,231 (Washington, D.C.).

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The legal requirement for suitability has long applied to the sale of investment products—products considered securities, in other words—including stocks, bonds, mutual funds, etc. In the relatively recent past that legal requirement for suitability has been increasingly applied to the sale of other non-security financial products. However, even though the legal requirement for suitability in connection with the sale and recommendation of non-security products is relatively recent, insurance professionals have always considered the need for suitability in the recommendation and sale of all financial products, including annuities, to be an important ethical requirement.

Pursuant to the requirement for suitability in annuity transactions, an insurance producer—in recommending the purchase or exchange of an annuity that results in an insurance transaction—must have a reasonable basis for believing that the recommendation is suitable for the consumer. Furthermore, an insurer may not issue a recommended annuity unless it has a reasonable basis to believe it is suitable for the consumer.

Before examining the requirement for suitability in the recommendation and sale of annuities, we should consider just what we normally mean when we speak of something as being “suitable.” In the sense in which the term is used in connection with a financial product, a thing is suitable when it is appropriate for the consumer and relevant to his or her objectives. Thus, other words that may be seen as synonyms for suitable include “suited,” “meet,” “fit” and similar terms. Terms that are antonyms for suitable—terms that generally refer to things that are “unsuitable,” in other words—include “improper,” “inappropriate,” “irrelevant” and “unacceptable.” Accordingly, in a general sense, something is suitable for an individual to the extent that it is appropriate for him or her in light of all the relevant factors.

Excerpt from Life and Health Insurance Law
Defining Contracts

An insurance policy is a contract, so it should not be surprising that its basic elements are the same as those that form any contract. These elements are the following:
• offer
• acceptance
• consideration
Before considering each of these elements of a contract, we need to understand the nature of a contract. A contract is nothing more or less than an agreement enforceable at law. In other words, a contract involves a binding promise for which the law creates a duty of performance. The duty to perform that is created out of the contract is a duty imposed on the party that makes the promise; that party is known as the promisor. In basic contract law, the party to whom the promise is made is known as the promisee. Once the offer is made and before the contract is entered into, the party making the offer is known as the offeror; the party to whom the offer is made is known as the offeree.
If the promisor fails to perform as required by the contract, the promisee can generally take one of two courses to enforce the contract. The promisee can sue for money damages under the contract, a course known as an action at law, or the promisee can sue for specific performance of the terms of the contract. This latter course is generally referred to as an equitable action and is taken when money damages are insufficient. An insurance contract, as we will discover in the next section, is simply a special kind of contract—one that is an aleatory and unilateral contract of adhesion.

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Under an amendment to earlier regulations concerning grandfathered health plans, a grandfathered group health plan may switch insurance companies without losing its grandfathered status, provided the structure of the coverage does not violate one of the other rules for maintaining grandfathered health plan status. Because of that amendment, an employer may replace its grandfathered group health plan—to obtain lower health plan costs, for example—without placing its grandfathered status in jeopardy if the resulting coverage does not result in significant cost increases, a benefit reduction, or other prohibited changes described later in this chapter. This amendment permitting the limited change of health plans without affecting grandfathered status does not apply to individual health insurance policies.

While the grandfathering provision of the Act generally enables individuals to keep their current coverage, it also imposes specific requirements on such plans to enable them to maintain that grandfathered status. Among these are certain disclosure and documentation requirements.

In addition, in order for grandfathered health plans to keep their favored status, they must avoid specified actions that would cause them to lose it. In general, the actions likely to cause a grandfathered health plan to lose that status are actions that would tend to reduce or eliminate participant benefits or increase participants’ costs.

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