Ask Questions.
If you have questions about any agent, insurance company or policy, you can contact the Division of Insurance. You can also obtain a list of approved individual long-term care insurance products.
Check With Several Companies and Agents.
You should consider contacting several companies (and agents) before you buy. You have a right to ask agents for a “policy illustration form” which is a standard form that can be compared with similar forms of other companies. Be sure to compare benefits, the types of facilities or types of care covered, the limits on and exclusions to your coverage and the premium. Remember that policies that have the same coverage and benefits may not cost the same. Be aware that cheaper today does not necessarily mean cheaper over the lifetime of the policy. Companies may need to raise rates later if premiums collected do not cover expenses. Since you may not be able to switch to a similar policy with another company at a later time, you should look at a company’s rate history when considering whether it may be likely to increase premiums in the future. You should also consider the length of time that you may hold a policy and pay premiums before needing any policy benefits.
Take Your Time and Compare Outlines of Coverage.
Never let anyone pressure or scare you into making a quick decision. Don’t buy a policy the first time you see an agent. Ask for an outline of coverage - it outlines the policy’s benefits and points out important features - and compare outlines of coverage for several policies. In Massachusetts, an agent must leave a company’s outline of coverage with you when he or she first contacts you about buying a policy.
Take Someone with You When You Meet with an Agent. Two sets of ears are better than one and it helps to have someone you can call besides the agent to remind you of details that are unclear.
Understand the Policy.
Learn what the policy covers and what it doesn’t. If you have any questions, call the insurance company or a counselor before you buy. An agent may give you answers that are vague or different from the information in the company literature. You may have questions about the policy. If either happens, tell the agent you will get back to him or her later. Don’t hesitate to contact the company to ask questions. Don’t trust presentations claiming you have only one chance to buy a policy. Some companies may sell their policies through the mail, skipping agents entirely. If you buy a policy through the mail, check with the company if you don’t understand how the policy works. Talk about the policy with a friend or relative.
Don’t be Misled by Advertising.
Most celebrity endorsers are paid to advertise. They are not insurance experts. Neither Medicare nor any other federal agency endorses or sells long-term care insurance policies. Be wary of any advertising that suggests the federal government is involved. Don’t trust cards you get in the mail that look as if the federal government sent them. Insurance companies or agents trying to find buyers may have sent them. Be careful if anyone asks you questions over the telephone about Medicare or your insurance. They may sell any information you give to long-term care insurance marketers, who may then contact you by phone, or come to your home to sell you insurance.
Don’t Buy More than One Long-Term Care Insurance Policy.
You don’t have to buy more than one policy to get enough coverage for long-term care. One good policy should be enough. Be sure to discuss any change in your coverage with a qualified advisor.
Be Sure You Accurately Complete Your Application.
Don’t be misled by long-term care insurance marketers who say your medical history isn’t important – it is! Give correct information. If an agent fills out the application for you, don’t sign it until you have read it first. Make sure that all of the medical information is correct. If it isn’t and the company used that information to decide whether to insure you, it can refuse to pay your claims and even cancel your policy.
Never Pay with Cash. Use a check or money order payable to the insurance company and keep all cancelled checks.
Consider Having the Premium Automatically Withdrawn from Your Bank Account. Automatic withdrawal will prevent you from losing coverage if you forget to pay your premium. If you decide not to renew your policy, be sure to tell the bank to stop the automatic withdrawals. Be sure to check with the insurance company about possible fees if you are considering this option.
Be Sure to Get the Name, Address and Telephone Number of the Agent and Company.
Get a local or toll-free telephone number for both the agent and the company.
If You Don’t Get Your Policy within 60 Days, Contact the Company or Agent.
You have a right to expect prompt delivery of your policy. When you get it, keep it somewhere you can easily find it. Tell a trusted friend or relative where you keep it.
Be Sure You Look at Your Policy during the Free-Look Period.
If you decide you don’t want the policy soon after you buy it, you can cancel it and get your money back. You must tell the company you don’t want the policy within a certain number of days after you get it. The “free-look” period must be noted on the front of the policy. If you want to cancel, keep the envelope the policy was mailed in or ask the agent for a signed delivery receipt when he or she hands you the policy. Send the policy to the insurance company along with a short letter asking for a refund. Send both the policy and the letter by certified mail and keep the mailing receipt. Keep a copy of all letters. Please note that it might take four to six weeks to get your refund.
Read the Policy Again and Make Sure It Gives You the Coverage You Want.
Check the policy to see if the benefits are what you expected. If you have any questions, call the agent or company right away. Also, re-read the application you signed. It too is a part of the policy. If it’s not filled out correctly, contact the agent or company right away.
Provide Your Spouse or Dependents with a Copy of Your Policy. In the event that you are incapacitated, it is important that those who would be responsible for your care understand what coverage you have through your long-term care insurance.
Check the Financial Stability of the Company You’re Thinking About Buying From. Several insurer rating services analyze the financial strength of insurance companies. The ratings can show you how analysts view the financial health of individual insurance companies. Different rating services use different rating scales. Be aware of how the agency labels its highest ratings and the meaning of the ratings for the companies you are considering. You can get free ratings from some insurer rating services at most public libraries. Or you can call the services directly or access the internet addresses listed below. (Note that calls to a “900” number will mean an extra charge on your telephone bill.)
- A.M. Best Company (908) 439-2200 (charged to a credit card) or on the internet at http://www.ambest.com
- Duff & Phelps, LLC (212) 450-2800 on the internet at http://www.duffandphelps.com
- Fitch Ratings (212) 908-0500 or on the internet at http://www.fitchibca.com
- Moody’s Investors Services, Inc. (212) 553-1658 or on the internet at http://www.moodys.com
- Standard & Poor’s Insurance Rating Services (877) 299-2569 or on the internet at http://www. www2.standardandpoors.com
- Weiss Research Inc. (800) 289-9222 or on the internet at http://www.weissratings.com