Long-Term Care Insurance *****

Disclosure

Just like before, the outline of coverage and the Buyer's Guide are the same as has been previously discussed, so here is yet another review.

Outline of coverage (long-term care)

The outline of coverage must be delivered at the time of application or no later than at the time of policy delivery, give a description of benefits, a statement of exclusions limitations in the policy, and a statement of renewal provisions, including any right to change premiums. For long term care policies it must also include:

• a statement that the outline of coverage is a summary of the policy and that the policy should be consulted to determine governing contractual provisions;
• a graphic comparison of the benefit levels of a policy that increases benefits over the policy period and a policy that does not increase benefits, showing benefit levels over a period of at least 20 years; and
• any premium increases or additional premiums required for automatic or optional benefit increases. If the amount of premium increases or additional premiums depends on the age of the applicant at the time of the increase, the insurer must also disclose the amount of the increased premiums or additional premiums for benefit increases that would be required of the applicant at the ages of 75 and 85 years.

Buyer's Guide *****

This is also called a shopper's guide and must be delivered prior to presenting an application. Life insurance policies or riders containing accelerated long-term care benefits are not required to furnish the above-referenced guide, but shall furnish the Policy Summary required under Florida law.

Advertising and Marketing

As was said before, a little common sense goes a long way here. All insurance companies have to file their advertisements, not matter the type of media, with the Office of Insurance Regulation. The insurance company can start using the advertising immediately but if it is disapproved they must immediately stop using it.

A qualified long-term care insurance policy must include a disclosure statement within the policy and within the outline of coverage that the policy is intended to be a qualified long-term contract. The disclosure must be prominently displayed and must read as follows:

"This long-term care insurance policy is not intended to be a qualified long-term care insurance contract. You need to be aware that benefits received under this policy may create unintended, adverse income tax consequences to you. You may want to consult with a knowledgeable individual about such potential income tax consequences.

Requirements for replacements

This is more repetitive information. Applications have to included questions to determine if the applicant has another long term care policy and if the person is trying to replace that policy. The agent has to list any other health policies they have sold to the applicant.

If the sale is a replacement, the applicant has to be given a Notice Regarding Replacement of Accident and Sickness or Long-Term Care Coverage. One copy of the notice must be retained by the applicant, and an additional copy signed by the applicant must be retained by the insurer. The replacing insurer must notify the existing insurer of the proposed replacement within five working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.

If a long-term care insurance policy replaces another long-term care policy, the replacing insurer must waive any exclusionary time periods applicable to time limit on certain defenses, preexisting conditions, and probationary periods in the new long-term care policy to the extent that they were satisfied under the original policy.

Producer training

Agents have to have training about partnership policies before they sell long term care insurance, and the insurance company has to keep records showing the training occurred.

Suitability *****

Every insurer must use suitability standards to determine if long-term care insurance is appropriate for the applicant. To determine suitability, the following must be taken into consideration:

• The ability to pay the premium;
• The applicant's goals or needs with respect to long-term care; and
• The values, benefits, and costs of the applicant's existing insurance, if any, when compared to the values, benefits, and costs of the recommended purchase or replacement.

If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application.