What Happens If I Don’t Pay My Long Term Care Insurance Premium and My Policy Lapses?

This following is a general statement of what happens often but is not a guarantee of an outcome. Whether you can ultimately reinstate your Long Term Care Insurance Policy (“Policy”) depends heavily on: (a) Policy terms; (b) state where you live; ( c) state where you purchased the Policy; and (d) statutes and regulations where you live or where you purchased the Policy.

In general, if you have a Policy and your Policy lapses, the insurance company may reinstate your Policy back to the date it lapsed, if within a certain amount of months of that date you or someone acting for you:

1. Requests reinstatement;
2. Submits there is no health change (proof of good health) acceptable by the insurer; and
3. Pay all past due premiums

Note: If your request for reinstatement is approved your Policy is reinstated and your premium is the same as if you hadn’t lapsed.

4 Opportunities to Keep Your Long Term Care Policy in Force

Usually your insurance company will give your 4 opportunities to keep your Long Term Care Policy in force.

1. Pay your premium on time.
2. If you don’t pay it on time, but you pay within the Policy grace period, meaning within some days after the premium due date. This is governed by the policy terms or the laws where you live or where the policy issued.
3. If you don’t pay within the grace period, the insurance company will send you a written lapse notice. You then may have some days from the date that notice is mailed to send in the premium due. If you do this, Your Policy will still remain in force.
4. Even if you don’t pay your premium timely, you may have a final opportunity to keep your Policy in force. It is called reinstatement. Generally, you can reinstate your Policy within some months after the date your Policy lapsed. To reinstate your Policy, you have to do more than just send in your money.
   1. You have to send in all premiums due;
   2. You also have to request reinstatement; and
   3. You have to submit proof of good health. If your health status has taken a turn for the worse, the insurance company may decline to reinstate.

Note: Since the insurance company is giving you months to reinstate, the insurance company will require you to prove your continuing good health before it will reinstate. The insurance company demands this does this to protect against what the insurance industry calls “anti-selection” (insuring only because you know you are not healthy and are likely to make a claim).

What If You Lapse Your Policy and Request Reinstatement for Cognitive Impairment or Loss of Functional Capacity?

Review the provisions in your long term care insurance policy which should state the specific conditions under which benefits will not be paid. Most policies contain provisions similar:

If your Policy lapses, your insurer should reinstate your Policy back to the date it lapsed, without proof of your good health, if within some months of that date, you or someone acting for you does the following:

1. Requests reinstatement;
2. Submits proof acceptable to the insurance company that you had/have a Severe Cognitive Impairment or loss of functional capacity before the Policy lapsed; and
3. Pay all past due premiums are paid. If approved and reinstated your premium should be what it would have been if Your coverage had not lapsed.

Note: The insurance company, under this long term care lapse provision, gives you, or someone acting on your behalf, the opportunity to reinstate the Policy without requiring proof of your good health if it can be shown that you were suffering from either Severe Cognitive Impairment or loss of functional capacity before the Policy Lapsed. If the Lapse was likely a result of your mental or physical inability to pay the premium, the company will provide a six-month period in which the Policy can be reinstated without requiring proof of your good health.

For Questions About Long Term Care Lapse Provision

If you need help with your long term disability claim or have questions about a long term care lapse provision, the experienced disability attorneys at Jonathan M. Feigenbaum, Esquire may be able to help you win the benefits you deserve. Contact us today.