Lapses and Changes in Insurance Policies Can Cost Ailing Seniors When They Need Care the Most



Hook Law Center (formerly Oast & Hook)

Hook Law Center (formerly Oast & Hook)

Virginia Beach, VA (Law Firm Newswire) April 23, 2015 – Many Americans purchase long-term care insurance to ensure that if they come to need nursing home or other long-term care, they will be able to afford it.

Because long-term care insurance offers no active use until a health crisis develops, it is important for policyholders to stay on top of payments and to be aware of any changes to the policy.

“In the months leading up to a real need for long-term care, seniors’ changes in health or mental state can sometimes lead them to fall behind on their insurance payments, which can cause the policy to be terminated,” said Andrew H. Hook, a Virginia elder law attorney with Hook Law Center. “Once a policy has been terminated, the insurance company may refuse to reinstate it. And when that happens, a senior loses long-term care coverage right before he or she actually needs to use it.”

To avoid policy lapses, some set up automatic payments for the policy. This arrangement can effectively prevent policy lapses, but there can still be complications. It becomes important, for example, to reset automatic payments when card numbers or bank accounts change.

Individuals can also add a third party, such as a child who has been named power of attorney, to the policy. Policyholders can request that this person be informed of any changes to or lapses in the policy, so that action can be taken before the policy is lost.

However, in many cases, insurance companies have no legal obligation to send notification of lapses or policy termination to third parties named on the policy. As such, family members should be vigilant about checking up on the policy if the elder is beginning to display signs of confusion, forgetfulness or declining health.