Statistically, at some point in a person’s life, they’ll need some form of long term care. While we hope that day is far away, those that have long term care insurance likely will, eventually, need to access it – often at a time in their lives when they’re not working and, potentially unable to care for themselves.
Insurance is paid through premiums, typically on a monthly or annual basis. When a person accesses their policy and is in long term care, one question that may arise is whether or not they have to keep paying the premium given that they’re in the process of using the insurance.
The answer is, as with all insurance types, it depends. But in most cases you do not, provided that your insurance policy has what’s called a “Waiver of Premium” Clause – a clause in most, but not all, long term care insurance policies.
What is a Waiver of Premium Clause?
Most traditional long term care insurance policies include a waiver of premium clause, which allows the policyholder to stop making premium payments once they begin receiving care that qualifies under the policy terms. Essentially, once you need the benefits, you can stop paying the premium, as it’ll be waived by the insurer.
The waiver typically begins:
- After the elimination period (waiting period before benefits begin) has been satisfied
- Once the insurer confirms that the insured is eligible for benefits and has started receiving qualified care
In other words, you generally stop paying premiums after your claim is approved and your benefits start – but *only* if your policy includes this clause.
Within this clause there may also be some important language as well. For example, you may be able to waive premium in some circumstances but not others – for example, based on the facility in which you’re receiving care. You may also have unique rules about combined policies (if you and your spouse share a long term care insurance policy), or if you have what’s called a “hybrid policy.”
If you stop receiving long term care, you would likely need to start paying the premium again. There may also be, depending on the policy, a period where you need to keep paying the policy until approval.
Our goal as long term care insurance specialists is to make sure you’re informed about all of these, but if you already have a long term care insurance policy, make sure you read it in full and look for the Waiver of Premium Clause. It is one of the most important clauses in a long term care insurance contract, because that time period between needing the insurance and getting approved can be an important one that affects your policy overall.
What Happens if You Do Not Have This Clause?
If you currently do not have a waiver of premium benefit clause, talk to your insurance agent first about options. You should also consider keeping a family member, heir, or someone else that is in frequent contact with you informed about your policy and its premium, with a plan in place to make sure that you’re still able to pay the premium even after accessing it.
If you have any questions about this clause, or about long term care insurance in general, please make sure to contact Long Term Care Resources, Pacific Agency (LTCR Pacific) today. Our team truly cares about making sure you are informed and are here to help you manage your long term care insurance decisions.