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Things You Should Know Before You Buy Long-Term Care Insurance

Long-Term Care

Insurance

• A long-term care insurance policy may not pay all necessary expenses for your care in a nursing home, care at home or other community settings. If the policy does not cover all necessary expenses, you will have to pay expenses that are not covered. Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it.

• [You should not buy this insurance policy unless you can afford to pay the premiums every year.] [Remember that the company can increase premiums in the future.]

Drafting Note: For single premium policies, delete this bullet; for noncancellable policies, delete the second sentence only.

• The personal worksheet includes questions designed to help you and the company determine whether this policy is suitable for your needs.

Medicare • Medicare does not pay for most long-term care.

Medicaid • Medicaid will generally pay for long-term care if you have very little income and few assets. You should not buy this policy if you are now eligible for Medicaid.

• Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services.

• When Medicaid pays your spouse’s nursing home bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets.

• Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency.

Shopper’s Guide

• Make sure the insurance company or agent gives you a copy of a book called the National Association of Insurance Commissioners’ “Shopper’s Guide to Long-Term Care Insurance.” Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back any premium you have paid if you are dissatisfied for any reason or choose not to purchase the policy. The Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) also publishes a consumers’ publication about long-term care insurance. You can request a copy of this publication by calling 1-800-631-7788 or on BISHCA’s website: http://www.bishca.state.vt.us/HcaDiv/consumerpubs_healthcare/index_con sumerpubs.html.

Counseling • Free counseling and additional information about long-term care insurance are available through your state’s insurance counseling program. Contact the State Health Insurance Assistance Program (SHIP) at 1-800-642-5119 or the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) at 1-800-631-7788 for more information about the senior health insurance counseling program in your state.

Facilities • Some long-term care insurance contracts provide for benefit payments in certain facilities only if they are licensed or certified, such as in assisted living centers. However, not all states regulate these facilities in the same way. Also, many people move into a different state from where they purchased their long-term care insurance policy. Read the policy carefully to determine what types of facilities qualify for benefit payments, and to determine that payment for a covered service will be made if you move to a state that has a different licensing scheme for facilities than the one in which you purchased the policy.

APPENDIX D Long-Term Care Insurance Suitability Letter Dear [Applicant]:

Your recent application for long-term care insurance included a “personal worksheet,” which asked questions about your finances and your reasons for buying long-term care insurance. For your protection, state law requires us to consider this information when we review your application, to avoid selling a policy to those who may not need coverage or who cannot afford to purchase long-term care insurance.

[Your answers indicate that you may not be able to afford or you may not need long-term care insurance. We suggest that you review the information provided along with your application, including the booklet “Shopper’s Guide to Long-Term Care Insurance” and the page titled “Things You Should Know Before Buying Long-Term Care Insurance.” If you have questions about long-term care insurance, you can contact the State Health Insurance Assistance Program (SHIP) at 1-800-642-5119 or the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) at 1-800-631-7788.]

[You chose not to provide any financial information for us to review.]

Drafting Note: Choose the paragraph that applies.

We have suspended our final review of your application. If, after careful consideration, you still believe this policy is what you want, check the appropriate box below and return this letter to us within the next 60 days. We will then continue reviewing your application and issue a policy if you meet our medical and financial standards.

If we do not hear from you within the next 60 days, we will close your file and not issue you a policy. You should understand that you will not have any coverage until we hear back from you, approve your application and issue you a policy.

Please check one box and return in the enclosed envelope.

… Yes, [although my worksheet indicates that long-term care insurance may not be a suitable purchase,] I wish to purchase this coverage. My insurance agent did not pressure me to make this decision. Please resume review of my application.

Drafting Note: Delete the phrase in brackets if the applicant did not answer the questions about income.

… No.

_________________________________________ ______________________________

APPLICANT’S SIGNATURE DATE