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Quick senior link–
What should I know about long-term care
insurance?
Q: I have been thinking about purchasing a long-term care
insurance policy. Do you have some guidelines that should be considered when
looking at different options?
A: Minnesota’s State Health Insurance
Assistance Program (SHIP) can help you determine
which policies are best suited for your long-term
care plans. This program can be reached through the
Senior LinkAge Line® at 1-800-333-2433.
There are several key steps that should be
considered before making a final decision on
purchasing a long-term care policy. The Attorney
General’s Office encourages consumers to adhere to
the following guidelines:
• Take your time and shop around. Since
policies differ in coverage and cost, consider
contacting several companies to compare and contrast
policies. Also, take your time in reviewing the
different policies.
• Check out the company and agent. Check with
the Minnesota Department of Commerce to make sure
the company and the agent are licensed and in good
standing.
• Ask around. You may want to consider
consulting a financial planner, tax advisor,
accountant or attorney before purchasing long-term
care insurance.
When reviewing policies, be sure that you
understand all of the requirements. The following is
information on some of the requirements and
provisions that appear in long-term care insurance
policies:
Minnesota law requirements – Minnesota law
requires long-term care policies to contain the
following: (1) at least one year of coverage,
including nursing home or home health care; (2)
Alzheimer’s disease coverage (if the policy is
initiated before the disease is diagnosed); (3) an
inflation protection option; (4) an "outline of
coverage" that explains benefits, limitations
and exclusions; (5) a "guaranteed
renewable" clause that states the policy cannot
be canceled unless the premium is not paid; (6) a
statement that the policy can be canceled by the
consumer within 30 days of its start.
Duration of benefits – a policy must cover
at least one year, but can provide up to a lifetime
of coverage. A policy might be less expensive if the
benefit period is shorter.
Elimination period – refers to the number of
days you must be in a nursing home or the number of
home care visits you must have before receiving
benefits. The number may range from zero to 100
days.
Qualifying for coverage – you must meet certain
criteria before collecting benefits. This means you
must meet varying requirements, including the
inability to dress, bathe and eat independently. If
a policy has stricter requirements, it is likely to
cost less.
Assisted living – may be covered at varying
levels in different long-term insurance policies.
Make sure to carefully read a policy’s provisions
concerning assisted living.
Inflation protection – the more a policy is
protected from inflation, the more likely its
premium will be higher.
Pre-existing conditions and exclusions –
Minnesota law requires pre-existing conditions to be
covered after a six-month waiting period. You should
be aware that other exclusions in the policy might
also apply.
For a free copy of the publication Long-Term Care
Insurance: What You Need to Know, call or write the
Department of Commerce. The contact information is
listed below. This agency also licenses insurance
companies and accepts complaints concerning
long-term care insurance companies.
Minnesota Department of Commerce
85 East Seventh Place, Ste. 500
St. Paul, MN 55101
651-296-2488 or 1-800-657-3602
www.commerce.state.mn.us
For additional information or to make a
complaint, the Attorney General’s Office can be
reached by phone, mail or electronically as follows:
Minnesota Attorney General’s Office – Citizen
Assistance
1400 NCL Tower
445 Minnesota St.
St. Paul, MN 55101
651-296-3353
1-800-657-3787
TTY: 651-297-7206
TTY: 1-800-366-4812
www.ag.state.mn.us
Quick Senior Link items are taken from frequent
calls to the Senior LinkAge Line®, a free service
that connects seniors to programs or services that
they need. Call 1-800-333-2433 or visit www.mnaging.org.
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