Like any insurance policy, there are certain terms you are likely to hear or see used when your policy or benefits are explained. Understanding these terms will only help you navigate the waters of shopping for long-term care insurance.
Ability to Renew: In today’s market, nearly all long-term care policies are guaranteed renewable. This means that as long as you pay your premium and did not lie on your application, the insurance company cannot cancel your policy. The premiums can only increase when the insurance company raises premium prices for an entire group of policy holders. In other words, the insurance company cannot increase your premium based on age or health.
Disclosure: You are required to disclose all information regarding your health and medical history. Failure to disclose information on your application can legally result in the denial of coverage when you file a claim.
Duration or dollar limit of benefits: The amount of coverage you are eligible for based on your policy is either a duration or dollar limit. In a duration, the policy covers an established amount of days, weeks, months or years of long-term care. In a dollar limit plan, the policy covers costs until the maximum dollar amount (chosen when the policy is purchased) is reached.
Eligibility: Typically, if you are in good health, between the ages of 18 and 84 and able to care for yourself you should be eligible for long-term care insurance. Age limitations only apply to the age you are when you purchase the policy, not the age in which you use the benefits.
Waiver of Premium: This provision allows you to stop paying your premium when you are receiving benefits. Some policies will require you are in a nursing home for 90 days before you may stop paying the premium, so read the fine print carefully.
