Qualifying for Benefits

• Long-term care insurance policies only begin paying benefits when you meet the carrier's criteria. While every insurance carrier is free to set its own eligibility rules, under most policy guidelines, once you are unable to perform a specific number of Activities of Daily Living, or ADL's, such as cooking, cleaning, using the bathroom, tying your shoes and other such basic tasks, you become eligible for assistance under your long-term care policy. Each policy contract is written differently, so familiarizing yourself with the section of your plan regarding qualifications for payouts is essential.
  
  

Guaranteed Premiums

• Even when an insurance company quotes you a premium and tells you it will never change, the truth is that your premium can change at any time. However, increasing premiums requires significant time and effort, and only a court ruling will permit such changes. If the company successfully demonstrates to the court that previously sold long-term care policies were severely underpriced and that those inadequate premiums further threaten other policyholders, the judge may grant permission for the carrier to raise rates on existing contracts.
  
  

Bankrupt Insurance Companies

• The security and stability of your long-term care insurance policy is based on the carrier's ability to pay claims. If the insurance company has no money to pay your benefits, your eligibility under the contract and the provisions of your plan are irrelevant. However, buying a policy from an insurance company that later goes bankrupt does not entirely result in absent benefits or wasted premium payments. Every state maintains an insurance guarantee association, and every life or health insurance carrier is required to participate and register as a member. When a carrier becomes insolvent, the guarantee association will handle all claims and collect all premiums or facilitate the transfer of your policy to another insurance company. In either case, both the provisions of your contract and the price you pay remain the same.
  
  

Facilities Acceptance

• The last remaining concern regarding the security of your long-term care insurance policy is whether or not the facility you may choose to enter will actually qualify as an approved venue. Each insurance company maintains a strict set of criteria by which it identifies different types of long-term care facilities such as nursing homes and assisted living quarters. If you enter a facility that fails to meet your long-term care provider's definition of eligibility, benefits may be withheld or otherwise restricted.