Be Careful of Changes in Insurance Policies and Policy Lapses
White Plains, NY (Law Firm Newswire) March 26, 2014 - It is essential that premiums are paid on time for all types of insurance, and policyholders must ensure that they are aware of any policy changes.
These measures are of particular importance for long-term care insurance.
Long-term care insurance can help with the cost of assisted living, home care or a nursing home for those who need it. However, if a beneficiary is beginning to suffer from Alzheimer's or other dementia, it can be difficult to make sure premiums are being paid on time each month. Often, an adult child of the beneficiary pays the bills, or an automatic payment system is set up. Even then, problems can arise.
Recently, a Virginia man found that a long-term care policy for his parents had been cancelled without his knowledge. The man had set up automatic payments from his parents' bank account. He made sure he was designated as a third party that the insurer would notify about any changes in the policy or lapses in coverage.
However, when his parents needed coverage, he found that the policy had lapsed eight months earlier. The man's father, who had become confused and forgetful, went to his bank to cancel a different automatic bill payment, and ended up cancelling the long-term care premium payments. Letters from the insurer to the man's parents went unopened, and the man said he was never notified as a designate third party.
Such third party notifications are generally sent by regular U.S. mail, so there is no proof that they were sent (as there would be with certified mail). Insurers say that the cost of sending and tracking certified mail for such notifications would result in higher premiums, and that when other types of bills go unpaid, certified letters are not sent. However, those with long-term care insurance are at greater risk for dementia because of the age of the beneficiaries.
Legislative efforts have been mounted to require long-term care insurers to send third party notifications by certified mail. In the meantime, families must be more vigilant about ensuring that premiums are paid and that any changes in policies are noted.
New York Contact:
Maria M. Brill
Littman Krooks LLP
New York City Office
655 Third Avenue, 20th Floor
New York, New York 10017
(212) 490-2020 Phone
399 Knollwood Road
White Plains, New York 10603
(914) 684-2100 Phone
300 Westage Business Center Drive, Suite 400
Fishkill, NY 12524
(845) 896-1106 Phone
- Stay Socially Engaged As You Age
Staying socially active as you age not only makes life more fun, it can be good for your health. Researchers with the Rush Alzheimer’s Disease Center conducted a study that found that seniors who were highly social had a rate of cognitive decline 70 percent lower than less-social seniors. Interacting with others and keeping your […]
- Learn the Facts About Medicare, Medicaid and Long-term Care
More than 40 million seniors rely on Medicare for their everyday health insurance needs, and many mistakenly assume that Medicare will also cover long-term care if it is needed. In fact, there are specific limitations to Medicare coverage for long-term care, and such care is often covered instead by Medicaid, which has eligibility requirements. Therefore, […]
- The Importance of Asset Protection Strategies
Protecting your assets from creditors is an important part of estate planning. There are several different strategies that may be effective. Because individual situations vary and the laws regarding these strategies can be complex, you should only use them with the advice of an experienced estate planning attorney. With that in mind, here is an […]