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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75810  
Subject: Re: Long Term Care Date: 3/28/2011 11:01 PM
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Do you lose your policy? Do they let you make it up?

I don't know. What happens if you lose your job and you cannot pay your house insurance or your car insurance? I think you have to get a new policy, and I'd expect to have to do the same with LTC. I don't understand the insistence that the LTC insurance should operate under different rules than any other type of insurance.


Well, I'd sure want to know!
I can't tell if you are being difficult or obstreperous or janking my chain or really don't see any difference or what.

Here's the difference.
If I don't pay my homeowners insurance or car insurance they cancel the policy. If 6 months later I restart the policy, no problem---the cost is the same. Moreover, I don't have to pay any additional money for the time I was not covered.

If I don't pay my LTCC premium they somehow cancel the policy, yes? But what happens 6 months later when I want to restart the policy. Do they say "Sure. But now your are 58 instead of 48 when you took out the previous policy. So your new premium is significantly higher. Oh, and by the way you have to take a medical test to prove that you are in good health."?

Or do they say, "Okay, we'll reinstate your policy, but you have to make up the premiums that you skipped."?

As I see it a LTHC policy is similar to whole-life insurance. Part of the premium is pure insurance and part of the premium goes to build up an internal cash-value to cover the eventual claim. Whole life insurance policies have a nonforfeiture clause so that you can get back some of this excess money if the policy lapses.

Do LTHC policies have such a clause? I'm thinking that you'd really really want to make sure yours does. And I'm thinking that you'd really want to ask some direct questions about what happens if you can't pay the premium for a year or two.

It would really suck to pay $4000/yr for 15-20 years and then get laid off and lose your LTHC policy that you had been counting on.

I can't see how someone would be so cavalier as to not get this nailed down before committing to a policy.
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