MANDATORY LTC POLICY PROVISIONS CON’T
• OPTIONAL LTC POLICY PROVISIONS


Time Payment of Claims
Claims are required to be paid “immediately” and the normal time period is 60
days.
Proof of Loss
The insured has 90 days within which to file proof of loss. In case it was
reasonably possible to do so, and was not done, the claim will not be paid.
Claim Payment
In the case of life insurance, payments are made to the designated beneficiary,
unless none is named, in which case, the payment will go to the insured’s estate.
The insured may also make a request to pay for medical services received.
Autopsy
The company has the right to order an autopsy of the insured’s body, as long as
it is within legal rights to do so.
Change of Beneficiary
This is not possible only in case when an irrevocable beneficiary is named.
Legal Action
The legal window of opportunity to file a dispute claim against the insurance
company is between 60 days and 5 years.
Optional Policy Provisions
Misstatement of Age
In this case, benefits due are adjusted to reflect benefits that would have been
earned taking into account the correct age.
Unpaid Premiums
At the time a claim becomes due, any unpaid premiums are adjusted from the
amount and paid to the insured or beneficiary.
Over Insurance
In case a similar risk coverage exists with another insurer, excess premiums will
be refunded to the policy owner.
Cancellation
The company has the right to cancel the policy with 20 days written notice to the
insured and the insured may cancel the policy following the expiration of the
policy's original term.
Change of Occupation
If during the tenor of a policy the insured moves to a more hazardous job without
notifying the insurance company, the benefit will be reduced. If the opposite
happens, a refund will be made in the event of a loss.
Per Party Limits
To limit the amount of single party exposure that a company accepts, this amount
is specified regardless of the number of policies issued. Excess premiums for
coverages will be refunded to the estate.

OPTIONAL LTC POLICY PROVISIONS CON’T
• SUMMARY

State Statutes
Any conflict with state statues will be amended to conform automatically.
Earnings and Insurance
In case monthly benefits due at a time of disability exceed the insured’s monthly
earnings (or the average for the past two years), the insurance company is liable
only to the extent of the earnings.
Illegal Occupation
If a loss is incurred while perpetrating a felony or being involved in one, the
insurance claim is not payable.
Intoxicants and Narcotics
If a loss is incurred while under the influence of Intoxicants and Narcotics, unless
advised by a medical professional, a claim is not payable.
Non-forfeiture Options
As the popularity of long-term care policies grows, the insured is going to have to
be afforded non-forfeiture options that protect their policy values and benefits and
protect them from forfeiting the same. Life Insurance policies currently contain
three non-forfeiture options, but the wording of these non-forfeiture options will
be different for long-term care policies. The three non-forfeiture options are:
Cash Value
This would provide a guaranteed amount to be paid to the insured should
the policy be surrendered or lapsed.
Reduced Paid-up
This would provide that the daily benefit be reduced for the policy's benefit
period and that the insured not be required to continue payment of
premiums.
Extended Term
In this term there is extension of coverage for the full amounts that the
policy would have ordinarily paid without any future payments of premiums
for a limited extension of time.
Another type of non-forfeiture option that has come upon the long-term
care scene is a cash back feature. Under this provision, an insured might
typically receive 50, 60, 70, or 80% of total premiums paid upon
discontinuing the policy either by surrender or having the policy lapse. Of
course, as is the case in most cash back features, claims paid are
deducted from the amount of returned premiums.
SUMMARY
In this lesson we discussed Long Term Care Insurance. We covered the different
benefits for the insurer and the various policy matters related to this type of insurance.
We also learnt about different features of the Mandatory and Optional Provisions, which
are two different types of policy provisions under the Uniform Policy Provision Law. .