Waiver of Premiums and Reinstatement of Long Term Care Policy and Cognitive Impairment

UPDATED: Jul 22, 2023Fact Checked

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption

Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

UPDATED: Jul 22, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

UPDATED: Jul 22, 2023Fact Checked

The provisions in the sample long term care insurance policy clearly state the specific conditions under which benefits will not be paid. Most policies contain provisions similar to those outlined below.

__________

We will waive Your premium starting on the first day of the Policy Month which starts on or next follows the later of the date on which You: (1) become eligible for Benefits; and (2) satisfy the Elimination Period. You must resume payment of Your premium starting on the first day of the Policy Month, which starts on or next follows the date on which You are no longer eligible for Benefits.

COMMENT: Under this Policy, once you have become eligible for Benefits and satisfied the Elimination Period, you no longer are required to pay the premium as long as you remain eligible for Benefits. You will lose your eligibility for Benefits when you are no longer Chronically Ill. Under the terms of the Policy, you are deemed to no longer be Chronically Ill when you no longer require either Hands-On Assistance or Standby Assistance to perform at least two of the Activities of Daily Living or you no longer suffer Severe Cognitive Impairment.

Reinstatement The provisions in the sample long term care insurance policy clearly state the specific conditions under which benefits will not be paid. Most policies contain provisions similar to those outlined below.

If Your Policy Lapses, We will reinstate Your Policy back to the date it Lapsed, if within twelve (12) months of that date You or someone acting for You:

  1. Request reinstatement;
  2. Submit proof of good health, acceptable to Us, at Your expense; and
  3. Pay all past due premiums to Us, if We approve Your request for reinstatement.

If We reinstate Your Policy, Your premium will be what it would have been if Your coverage had not Lapsed.

COMMENT: The insurance company really wants your business. The company will actually give you 4 opportunities to keep your Policy in force. First, just pay your premium on time. Second, if you don’t pay it on time, at least pay it within thirty-one days after the premium due date, in other words, within the Policy Grace Period. Third, if you can’t get that done, the company will send you a written notice of Lapse. You have 35 days from the date that notice is mailed to send in the premium due. If you do this, your Policy will remain in force.

If you fail to do all of the above, the company gives you a fourthopportunity to keep your Policy in force. It is called reinstatement. You can take advantage of this fourth opportunity for 12 months after the date your Policy lapsed. Reinstatement is a little different than the other three. You have to do more than just send in your money. You have to send in all premiums due, but you also have to request reinstatement AND you have to submit proof of good health. In other words, if your health status has taken a turn for the worse, the company has the right to decline reinstatement.

Since the insurance company is giving you a reasonably long period of time to reinstate (12 months), the company requires you to prove your continuing good health before it will agree to reinstate. It does this in order to protect against what the insurance industry calls “anti- selection” (choosing to insure only because you know you are not healthy).

Reinstatement for Cognitive Impairment or Loss of Functional Capacity

The provisions in the sample long term care insurance policy clearly state the specific conditions under which benefits will not be paid. Most policies contain provisions similar to those outlined below.

If Your Policy Lapses, We will reinstate Your Policy back to the date it Lapsed, without proof of Your good health, if within six (6) months of that date, You or someone acting for You:

  1. Request reinstatement;
  2. Submit proof acceptable to Us that You had a Severe Cognitive Impairment or loss of functional capacity before the Policy Lapsed; and
  3. Pay all past due premiums to Us, if We approve Your request for reinstatement.

The standard of proof We will use will be no more restrictive than that described in the Eligibility for the Payment of Benefits section.

If We reinstate Your policy, Your premium will be what it would have been if Your coverage had not Lapsed.

COMMENT: The insurance company, under this provision, gives you, or someone acting on your behalf, the opportunity to reinstate the Policy without requiring proof of your good health if it can be shown that you were suffering from either Severe Cognitive Impairment or loss of functional capacity before the Policy Lapsed. In other words, if the Lapse was likely a result of your mental or physical inability to pay the premium, the company will provide a six-month period in which the Policy can be reinstated without requiring proof of your good health.

Case Studies on Waiver of Premiums, Long Term Care Policy Reinstatement, and Cognitive Impairment.

Case Study 1: Waiver of Premiums

In this case, an individual holds a long-term care insurance policy and has been paying premiums regularly. However, they are diagnosed with a chronic illness that requires long-term care, rendering them unable to work and afford the policy premiums. The policy includes a provision for a Waiver of Premium benefit, which allows the insured person to stop paying premiums while still maintaining the coverage.

By invoking the Waiver of Premium provision, the individual can have their policy premiums waived and continue to receive the benefits of the long-term care policy. This provision becomes crucial in providing financial relief to the insured person during their time of need, ensuring that they can access the necessary care without the added burden of premium payments.

Case Study 2: Reinstatement of Long Term Care Policy

In this case, an individual allowed their long-term care insurance policy to lapse due to non-payment of premiums. However, within the specified timeframe (usually 12 months), they realize the importance of maintaining the coverage and want to reinstate the policy. The policy includes a provision for reinstatement, which allows the insured person to restore their coverage back to the date of the lapse, subject to certain conditions.

To reinstate the policy, the insured person needs to submit all overdue premiums and may be required to provide proof of good health. If the conditions for reinstatement are met, the insurance company will agree to reinstate the long-term care policy, ensuring that the insured person continues to have access to the benefits and protection it offers. Reinstatement provides an opportunity for individuals to rectify the lapse in coverage and safeguard their future long-term care needs.

Case Study 3: Cognitive Impairment and Reinstatement

In this case, an individual allowed their long-term care insurance policy to lapse due to non-payment of premiums. However, within the specified timeframe (usually six months), they are diagnosed with cognitive impairment or a loss of functional capacity. The policy includes a provision for reinstatement in cases of cognitive impairment, which allows the insured person to reinstate the policy without the need for proof of good health.

To reinstate the policy, the insured person needs to submit all overdue premiums within the specified timeframe. The insurance company will reinstate the long-term care policy back to the date of the lapse, ensuring that the individual has coverage despite their cognitive impairment or loss of functional capacity. This provision recognizes the challenges faced by individuals with cognitive impairments and provides them with an opportunity to reinstate their coverage and receive the necessary long-term care benefits.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption

Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption