Long Term Care Insurance

An individual long-term care insurance policy is a contract between you and the insurer. These policies must be approved by the California Department of Insurance (CDI) and have all of the consumer protections required under California law. Individual policies are “guaranteed renewable” and cannot be canceled by the insurance company unless the premium is not paid on time. However, every company has the right to increase the premiums it charges with proper notification and approval from the Department of Insurance.

Group long-term care insurance is a contract between an insurer and a group, such as an employer on behalf of its employees, or a trade or professional association on behalf of its members. If you are covered under a group plan, you receive a “certificate” rather than a “policy” of insurance. Also, many of the policy terms have already been negotiated by the group, and the group (called the “master policyholder”) has the option to terminate the policy at any time. Often, but not always, group insurance is less expensive than individual insurance. If group coverage is terminated, you have the right to continue the coverage or buy a conversion policy, depending on the provisions of the policy and other factors. If you purchase group coverage, ask about what options will be available to you if the group cancels the policy or if you lose your membership or eligibility. Be sure to ask if the premiums will change, and ask how you will be notified.

Purchasing the right insurance that meets your needs can be challenging. Insurance can be one of the most important ongoing purchases you make to protect yourself and your family from financial hardship. Since your needs and financial situation change over time, it is important to understand and review your insurance policies annually to decide if the same policies are still right for you.