Long-Term Care Shopping Options

When it comes to shopping for long-term care insurance, there are several important tips you should always keep in mind.

Be Wary of Cards and Calls

Your mental "red flag" of extreme caution should go up any time a company or an agent solicits you with a card in the mail that looks like it is from the Federal government. This sort of deceptive mailing is a sign they may not be reputable. Also 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 might call you, come to your home, or try to sell you insurance by mail.

One LTC Policy is Enough

One LTC insurance policy is enough coverage. Speak to your advisor before you switch or upgrade your policy.

Accurately Complete Your Application

Do not be misled by long-term care insurance marketers who say your medical history is not important... it is! Give correct information. If an agent fills out the application for you, do not sign it until you have read it. If you do not give correct medical history, the company can refuse to pay your claims and could cancel your policy.

Never Pay in Cash

Use a check or money order made payable to the insurance company.

Get Company and Agent Information

Obtain the name, address and phone number for the company and the agent. They should provide you with a local and toll free number for the company and the agent.

Expect to Receive Your Policy Within 60 Days

If you do not receive your policy within 60 days, contact the company and the agent. Once you receive the policy, put it away for safe keeping and tell someone you trust where it is located.

Don't Forget About the "Free Look" Period

Examine your policy during the free look period. If you decide you do not want the policy soon after you bought 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. Companies differ on how many days are in the "free look" period. In some states the insurance company must tell you about the free look period on the cover page of the policy. In most states you have 30 days to cancel, but in some you have less time. Check with your state insurance department to find out how long the "free look" period is in your state.

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. It usually takes four to six weeks to get your refund.

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 is part of the policy. If it is not filled out correctly, contact the agent or company right away.

Consider Automatic Premium Deductions

Automatic withdrawals may mean that you won't lose your coverage if you forget to pay your premium. However, if you sign up for automatic withdrawals and you later decide not to renew your policy, be sure you tell your bank to stop the automatic withdrawals.

Check Financial Stability

Several insurer-rating services analyze the financial strength of insurance companies. The ratings can show you how some analysts see the financial health of individual insurance companies. Different rating services use different rating scales. Be sure to find out how the agency labels its highest ratings and the meaning of the ratings for the companies you are considering.

You can obtain ratings from some insurer rating services for free at most public libraries or you can call the services directly.