You purchased a long-term care insurance (LTCI) policy many years ago – perhaps through your employer or maybe on your own. As a fairly young person (maybe in your 30s or 40s), you were able to get in at a good rate. You’ve been paying your premiums regularly ever since.
Now you find out that the insurance company no longer sells LTCI policies. Maybe they went out of business altogether. Should you be concerned?
Some insurers no longer sell these policies
First, if your insurer stopped selling these policies, you’re not alone. Many leading insurers have stopped selling new policies. The claims just got to be too high, in many cases, and the interest rates too low.
Some insurers are still servicing their policies. Others have sold them to another company to service. If yours is being serviced by another provider, they would have notified you, or at least you’ll have noticed that your payments are now due to someone else. Either way, it shouldn’t affect your ability to collect on it when you need to. It’s wise to contact the new servicer if you have questions or concerns, though.
What if they went out of business?
If your LTCI provider went out of business, your policy should still be protected. All states have a program that protects insurers in situations like this. You can find out more at the National Organization of Life and Health Guaranty Associations (NOLGA.com).
Estate planning and LTCI
Don’t forget your LTCI when you’re doing your estate planning. The person you name as the personal representative for your estate should know about your plan and policy. It’s good to keep that information with your estate planning documents. They may need to be the ones to file a claim if you need a nursing home, memory care or other type of facility.
Filing an LTCI claim can be a complicated, frustrating process at a time when you or your loved ones are most vulnerable. If you’re having difficulty getting a claim approved or getting the compensation you’ve counted on being able to have all these years, it may be wise to seek legal guidance.