Third Party Notice. This benefit lets you name someone whom the insurance company would contact if your coverage is about to end because you forgot to pay the premium. Sometimes people with cognitive impairments forget to pay the premium and lose their coverage when they need it the most.
You can choose a relative, friend or a professional (e.g., a lawyer or accountant) as your third party. After the company contacts the person you choose, he or she would have some time to arrange for payment of the overdue premium. You can usually name a contact person without paying extra. Some states require insurance companies to give you the chance to name a contact and to update your list of contacts from time to time. You may be required to sign a waiver if you choose not to name anyone to be contacted if the policy is about to lapse.
Other Long Term Care Insurance Policy Options You Might Choose. You can probably choose other policy features, but keep in mind that not all insurers offer all of the policy options. Each may add to the cost of your policy. Ask your insurer what features increase your policy’s cost.
Waiver of Premium. Many policies automatically include this feature, but some may only offer it as an additional optional benefit. Premium waiver lets you stop paying the premium once you are eligible for benefits and the insurance company has started to pay benefits. Some companies waive the premium as soon as they make the first benefit payment. Others wait until you have received benefits for 60 to 90 days.
Restoration of Benefits. This option gives you a way to keep the maximum amount of your original benefit even after your policy has paid you benefits. With this option, if you fully recover after a prior disability and go for a stated period without needing or receiving more long-term care services, your benefit goes back to the amount you first bought. For example, assume your policy paid you $5,000 in long-term care benefits out of a policy maximum of $75,000. You would have $70,000 in benefits left. With a restoration of benefits option, if you fully recovered and didn’t need or use any long-term care services for a specified time (usually 6 months), your maximum benefit would go back to the original $75,000.
Premium Refund At Death. This benefit pays to your estate any premiums you paid minus any benefits the company paid. To get a refund at death, you must have paid premiums for a certain number of years. Some companies refund premiums only if the policyholder dies before a certain age, usually 65 or 75. The premium refund option may also add to the cost of a policy.
Downgrades. While it may not always appear in the contract, most insurers let policyholders reduce their coverage if they have trouble paying the premium. When you downgrade to a less comprehensive policy, you will pay a lower premium, usually based on your age at the time your purchased your original policy. This may allow you to keep the policy in force instead of dropping it.