LONG TERM CARE INSURANCE

1
LONG TERM CARE INSURANCE

• What you should look for when purchasing long
  term care insurance

2
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)

3
What should you consider?

• 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?

4
Outline of Coverage

• Premium Issues
• Renewability
• Waiver of premium
• Insurers right to change premium
• Free look

5
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

6
Personal Worksheet

• Designed to determine financial suitability
• Discloses insurers right to raise premiums
• Insurers rate increase history
• Discloses insurers 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

7
Rate Increase Disclosure Form

• Rate schedule
• Potential rate revisions
• Options in the event of a rate increase
• Continue policy
• Reduce policy benefits
• Exercise nonforfeiture option
• Exercise contingent nonforfeiture option

8
Contingent Nonforfeiture

• Is available if cumulative premium increase
  exceeds specified amount
• Varies by age, i.e. is 90 for issue ages
  55-59, 20 for issue age 80
• Provides paid up policy benefit
• CNF Benefit is the total amount paid in premiums
  before CNF exercised

9
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

10

• 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

11
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

12
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

13
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

14
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

15
LTC-P Exchange

• Effective date of Partnership policy is that of
  the new policy
• Insured will not lose any rights, benefits or
  built-up value that has accrued under original
  policy
• Exchange may be a new policy or an endorsement to
  existing policy

16
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

17
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

18
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.

19
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

20
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

21
Questions? Please contact Susan.Dobbins_at_oid.ok.gov
.

• Or visit our website,www.ok.gov/oid. Select
  Consumers, then Buying Insurance or Oklahoma
  Long Term Care Partnership