LONG-TERM CARE INSURANCE PROTECTION
In June 2006 Governor Jeb Bush signed into law new protections for
long-term care insurance policyholders. The measure prevents insurers
from contesting policies years after selling them and also stops the
practice that results in rapidly escalating premiums for aging
The Florida Department of Financial Services Consumer Services Division
receives hundreds of questions and complaints each year regarding
long-term care (LTC) insurance. Consumers have lodged complaints
regarding companies accepting premiums for years and then contesting the
policies when claims were filed.
Specifically, the new law includes the following provisions:
1. provides that a long-term care policy is incontestable after being in
force for two years, except for non-payment of premium;
2. prohibits an insurer from imposing a new waiting period when a policy
is replaced through an affiliated insurer;
3. eliminates the current minimum nursing home benefit of 24 months of
4. prohibits existing policyholders from being charged premiums that
exceed the premiums the insurer is charging to new policyholders;
5. requires the company to provide new benefit options to existing
policyholders faced with a significant rate increase, including a
modified benefit plan at the existing premium or a paid-up policy equal
to the sum of all premiums paid during the life of the policy; and
6. requires insurers to pool the claims experience of all affiliated
carriers when calculating rates rather than only the policy forms
providing similar benefits of the insured.
Factors to consider before purchasing long-term care insurance:
1. Do your homework before signing a contract.
2. Look for a financially strong insurer as you are purchasing a policy
that may not be used for many years.
3. Buy a flexible policy that will help you meet tomorrow’s advances in
4. Consider inflation coverage to meet future health care costs
5. Know what the qualifying requirements must be met before benefits can
be received (most policies require that you be unable to perform certain
"activities of daily living.”)
6. Ask what services are covered by the policy and what is excluded.
7. Find out about the daily benefits, the maximum benefit period and the
8. Consider whether you can afford the policy and whether you can
Statistics show that a 65-year-old person faces a 40 percent lifetime
chance of a nursing home stay, according to the U.S. Department of
Health and Human Services.
The Florida Department of Financial Services offers a useful consumer
guide called Long-Term Care & Other Options for Seniors. You can have
the guide sent to you by calling our helpline at 1-800-342-2762 (TDD
1-800-640-0996) or you may download the guide from the website at
Before you purchase an LTC policy or any other insurance or financial
product, verify that the agent, company and the products offered are
licensed in the state of Florida. You can verify this on the Florida
Department of Financial Services website, http://www.MyFloridaCFO.com/consumers/verify_before_you_buy/,
or by calling the consumer specialists at 1-800-342-2762.