Optional long-term care insurance policy features.
As with all optional features, always be sure you fully understand the terms and conditions of what you’re buying. Ask your long-term care insurance agent for any clarification you may need.
All policies sold in Texas must offer these options.
All long-term care insurance policies sold in Texas must offer the following optional features. Be aware, there may be an additional cost for these features.
Inflation protection: Inflation protection can help ensure your benefits keep up with the rising cost of living. Even a 3% inflation rate can cut the value of your dollar in half over 25 years. You should also assume health-care costs will rise more than the general inflation rate as the Baby Boomer Generation ages. All long-term care insurance policies must offer a 5% compound annual inflation protection rider as an option.
Nonforfeiture benefit: If you cancel your policy or lose coverage, a nonforfeiture benefit guarantees you will receive some of the benefits you have paid for. Generally, a nonforfeiture benefit will pay up to the total amount of all premiums paid, or 30 times the daily nursing home benefit at the time your policy lapsed—whichever is greater. A nonforfeiture benefit can significantly increase your premiums. If you decide not to purchase this option, you must reject the offer in writing.
Some companies may offer additional options.
In addition to inflation protection and nonforfeiture benefits, many companies may offer you other optional features as well. These options may increase your premium costs, so carefully consider if they are right for you.
Waiver of premium: When you are in a nursing home and the insurance company has started to pay benefits, the waiver of premium feature allows you to stop paying premiums. Companies may waive the premium as soon as they make the first benefit payment or after a specified time, usually 60 to 90 days. This provision may not apply if you are receiving certain benefits such as home health care or adult day care.
Restoration of benefits: Many policies restore benefits to the original maximum amounts if you don’t need long-term care services for a specified period—usually 180 days—after having received benefits.
Refund of premium: Some companies will offer a benefit that will allow you to have some or all of your premiums refunded, minus any claims paid. However, the terms of this benefit such as age limits, how it is refunded, or benefit amount, can vary.
