Federal Regulations Help Protect Seniors From Losing Their Long Term Care Insurance
In a recent interview, a senior researcher with a leading think tank made two great points about long-term care insurance:
“Only take out a long-term care insurance policy if you’re confident of your ability to afford premiums over the long haul” and “everyone should have a plan in place” to make sure their LTCi policy does not lapse.
Fortunately, federal regulations can help to protect seniors from unintentionally losing their long-term care coverage in two ways. For every long-term care policy that meets the federal guidelines:
Every insurance company must...
…reinstate the policy after it has lapsed (up to 6 months after the premium was due) if the policyholder was cognitively-impaired OR functionally-impaired when the policy lapsed.
Every insurance company must...
…contact each long-term care policyholder, at least every 2 years, asking each policyholder to designate which family members, friends and trusted advisers they want the insurance company to notify if their policy is in danger of lapsing.
Fortunately, fewer and fewer seniors are lapsing their long-term care insurance. The percentage of seniors that lapse their long term care insurance each year has dropped by 68% since 2000. (Source: Society of Actuaries, July 2015) Click To Tweet
Long term care insurance is the only type of insurance that has these protections in place. Sadly, many seniors unintentionally lose their life insurance every year because these consumer protections do not apply to life insurance–these protections only apply to long-term care insurance.
The most recent study by the Society of Actuaries uncovers some great information. We know that most people who purchase long-term care insurance keep it for life. But what about those who do lapse their policies? Are they just victims of forgetting to pay a bill on time?
Already Have a LTCi Policy? Need Lapse Protection?
Download instructions for you to register with your long-term care insurance company the names and address of your 3 closest friends, advisers, and family members to help keep your policy in-force.
Fortunately not. The majority of seniors who lapse their long term care insurance policies are NOT people who have paid premiums for decades and then simply forget to pay their premium. The study released by the Society of Actuaries in July, 2015 shows that most lapses by seniors occur within the first 5 years of buying the policy. In other words, they simply change their mind about their original purchase decision.
That is why we take the approach we do. We work with each client at their own pace. Our typical client purchases a long-term care policy about 90 to 180 days after first contacting us. We make sure you get the information you need to make the decision that is right for you. And we work with you, at your pace, as you progress through that buying decision.
Need a 2nd Opinion?
Already have a quote for LTC insurance? Need a 2nd opinion?
Schedule a free, no-obligation phone consultation with Scott.
