LONG TERM CARE
INSURANCE
What you should look for when purchasing
long term care insurance
Why Long Term Care Insurance?
• LTCI covers care provided outside of hospitals,
for chronic conditions
• Health insurance does not cover LTC
• Medicare does not cover LTC
• Medicaid does, but only for impoverished
individuals (more about Partnership policies
later)
What should you consider?
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How likely are you to need long term care?
Are caregivers available?
What is the cost of care in your area?
Can you afford premiums for long term care
insurance over the long term?
• Is it a tax qualified or non-tax qualified policy?
• Does offered policy meet your needs?
Outline of Coverage
• Premium Issues
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Renewability
Waiver of premium
Insurer’s right to change premium
Free look
Outline of Coverage
• Benefits
– Covered services including deductibles, waiting
periods, elimination periods and benefit maximums
– Institutional benefits by skill level
– Non-institutional benefits by skill level
– Eligibility for Payment of Benefits (benefit triggers)
– Limitations and exclusions
Personal Worksheet
• Designed to determine financial suitability
– Discloses insurer’s right to raise premiums
– Insurer’s rate increase history
• Discloses insurer’s rate increase history
• Agent must ask applicant to complete
– Income/asset questions
– Inflation protection/Elimination period questions
• Completion is voluntary but important
– Insurer may not complete sale without the information
Rate Increase Disclosure Form
• Rate schedule
• Potential rate revisions
• Options in the event of a rate increase
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Continue policy
Reduce policy benefits
Exercise nonforfeiture option
Exercise contingent nonforfeiture option
Contingent Nonforfeiture
• Is available if cumulative premium increase
exceeds specified amount
• Varies by age, i.e. % is 90% for issue ages 5559, 20% for issue age 80
• Provides paid up policy benefit
• CNF Benefit is the total amount paid in
premiums before CNF exercised
Long Term Care Insurance
Partnership (LTC-P)
• What is Asset Disregard?
• How does it work?
– Insured purchases a policy with $100 daily room
benefit, 2 year benefit period
– Insured enters Assisted Living Facility (a covered
facility), stays for 2 years
– Policy pays $ 73,000 in benefits
– Insured applies for SoonerCare
– All SoonerCare eligibility criteria apply, except that
$73,000 of assets that would ordinarily be counted
are disregarded
– Insured retains $73,000 that would ordinarily have to
be spent down
• For more information:
www.okltcpartnership.com
LTC Partnership Requirements
• Insured must be an Oklahoma resident (or resident of
another Partnership state) when coverage first becomes
effective
• Policy must:
– be tax-qualified and issued no earlier than July 1, 2008
– comply with current Oklahoma law and NAIC Model
requirements
– include inflation protection
• Insurer must comply with reporting requirements
LTC-P Inflation Protection
Requirements
• Insured less than 61 at time of purchase, 3% per
year compounded annually, or a rate,
compounded annually, that is based upon
changes in the Consumer Price Index
• Insured age 61-75, 3% per year or CPI
• Insured 76+, inflation protection not required
LTC-P Disclosures
• Prospective applicants must be given a
Partnership Program Notice that outlines the
requirements and benefits of a Partnership
Policy
• At issue, policy must include a Partnership
Disclosure Notice
• LTC-P disclosures are in addition to other
required disclosures
LTC-P Exchange
• Once an insurer begins to offer Partnership
Policies, insurer must offer the opportunity to
exchange an existing LTC policy for Partnership
Policy
• Insurer must make offer to persons whose LTCs
were issued on or after February 8, 2006
• Insurer only required to make offer for LTC that
is the type certified by the insurer
LTC-P Exchange
• Effective date of Partnership policy is that of the
new policy
• Insured will not lose any rights, benefits or builtup value that has accrued under original policy
• Exchange may be a new policy or an
endorsement to existing policy
LTC-P Optional Exchanges
• For policies issued before February 8, 2006,
insurers may offer insureds an option to
exchange
• If insurer does so, all exchange requirements
apply, including time limits, underwriting, and
rate requirements
LTC-P Reporting Requirements
• LTC Partnership insurers must report to
Department of Health and Human Services
when
– Insurance benefits have been paid and the amount of
those benefits
– Partnership policy terminates
Reporting Requirements
Upon request of an insured, LTC Partnership
insurer must provide insured with LTC
Partnership Program Policy Summary. That
document includes where the policy was issued,
the inflation protection option included in the
policy, the amount of benefits paid, and the total
dollar amount of insurance benefits remaining.
Producer Training Requirements
• Producers must complete a one-time training
course of no less than 8 hours
• Producers licensed for LTC on July 14, 2008,
have one year to complete the one-time training
course
• After the one-time training, producers must
complete ongoing training of 4 hours every 24
months
Producer Training Requirements
• LTC insurers shall obtain verification that
producer has received training before permitting
producer to sell LTC
• Insurer must maintain verification and make it
available to the Department upon request
Questions? Please contact
Susan.Dobbins@oid.ok.gov.
Or visit our website,www.ok.gov/oid. Select
Consumers, then “Buying Insurance” or
“Oklahoma Long Term Care Partnership”