Last week, my colleague Tara Siegel Bernard wrote about the challenges some consumers have had when trying to file claims for benefits under their long-term care insurance policies. One reader told about an experience she had when her mother – stricken with Alzheimer’s disease – canceled her own long-term care policy. Through persistent efforts, the reader said, she was able to have the policy reinstated, more than a year later.

It is not unheard-of, given the health status of those seeking benefits under long-term care insurance, for unintended breaks in coverage to occur. And long-term care policies typically have provisions for a grace period that allows for reinstatement after a lapse in coverage, in the event a policyholder fails to pay premiums, said Jesse Slome, executive director of American Association for Long-Term Care Insurance, an industry group.

The length of the grace period, however, depends on when the policy was written, Mr. Slome explained in an e-mail. Policies written before the Health Insurance Portability and Accountability Act of 1996, known as Hipaa, typically provided for a 30-day grace period, he said.

Policies written after the act was passed, he said, generally include a provision allowing the policy to be reinstated for up to six months, if the policy lapsed because of the policyholder’s failure to pay because of a cognitive impairment, or because he or she needed help with “activities of daily living.” (The law requires a period of at least five months, but some insurers allow as long as seven months, Mr. Slome said.)

In general, the policy will be reinstated when all overdue premiums are paid.

Some insurers calculate the six months starting from the date the policy lapsed, he said, while others count it from the date the premium was originally due.

Current policies also provide consumers with additional protections against an unintended lapse, Mr. Slome said. For instance, the policyholder must designate another person on their application for coverage and provide contact information so that person will be notified of any missed premium payments. (If a contact person is not designated, the policyholder must submit a written waiver electing not to do so).

In addition, he said, the insurer is required to notify the policyholder at least once every two years of their right to change the designation.

Have you ever had a lapse in your long-term care insurance policy? Have you named someone as an alternate contact, to avoid potential coverage problems?

Article source: http://bucks.blogs.nytimes.com/2013/06/13/preventing-lapses-in-long-term-care-policies/?partner=rss&emc=rss