Consumer Protections in Today’s Long-Term Care Insurance Policies

The following rules apply to all long-term care insurance policies:

  • Coverage cannot be cancelled or not renewed as long as you continue to pay premiums as they are due and you have not used up the maximum policy benefits.
  • You have 30 days after receiving the policy to return it for a full refund.
  • You have the right to designate another person to receive notice of premiums due and payments missed so you won’t accidentally miss a payment.
  • You have up to 65 days after the date a premium payment is due to make payment. Coverage cannot be cancelled for non-payment until after the grace period and until the “third party designee” has also been notified.
  • If coverage lapses for non-payment because you were “disabled” at the time, you can restore your coverage within five months of the missed premium due date.
  • If you have a group policy through your employer or other association, you can continue that coverage, unchanged, if you leave the group but want to maintain the policy.
  • A spouse insured through an employer group plan may maintain coverage even after a divorce.
  • Your premiums are designed to remain level over the lifetime of your coverage, and are based on your age when you first buy the policy. The insurer can change rates on a group (or class) basis, but has only a limited right to do so, and the change must apply to an entire group or class. You cannot be singled out for a rate increase.
  • In most states, rate increases must be filed with and approved by the State Department of Insurance. Many states have adopted regulations that make it very difficult for an insurer to obtain approval for a rate increase.
  • You typically have the right to decrease your coverage, without underwriting, if you find in the future that the current premium costs are beyond your financial means.

Things to Consider Before Buying Long-Term Care Insurance

  • Don’t buy out of fear or emotion.
  • Don’t buy more insurance than you think you may need. You may have enough income to pay a portion of your care costs and may need only a small policy for the remainder. You may have family willing and able to supplement your care needs.
  • Don’t buy too little insurance. That will only delay the use of your own assets or income to pay for care. Think about how you feel about having care costs that won’t be covered. While you can usually decrease how much coverage you have, it is more difficult to increase coverage, especially if your health has declined.
  • Look carefully at the policy you are considering. There is no “one-size-fits-all” policy.
  • Does the policy pay only for room and board in a facility? If so, plan for other expenses, such as supplies, medications, linens, and other things that may not be covered.
  • It costs less to buy coverage when you are younger. The average age of someone buying long-term care insurance today is about 60. For those who purchase policies offered at work, the average age at which they buy is about 50.
  • Make sure that buying the long-term care insurance policy is a sound financial decision and affordable for you.
  • Look at different options and talk with a professional before making a decision.

Source: National Clearinghouse for Long-Term Care Information, Department of Health and Human Services,, accessed September 3, 2011

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