What Happens If You Stop Paying Your Premiums On Your Long-term Care Insurance Policy?
What happens if you stop paying your premiums on your Long-Term Care Insurance Policy?
What happens if you stop paying your premiums on your Long-Term Care Insurance Policy? When you purchase a long term care insurance policy it is important that you make a long term commitment to pay the premiums for an extended period of time. If you stop paying your premiums it is likely, as with most types of insurance coverage, that your policy will be canceled therefore loosing all premiums that have been paid in. Having non- forfeiture benefit options added to your policy will help protect the policy holder but it can be very expensive.
Some companies do offer a non-forfeiture benefit option to protect the policy holder from loosing premiums paid in when canceling a policy. A non-forfeiture benefit option offers the policy holder protection if they decide to cancel their coverage for whatever reason. A non-forfeiture benefit option can add 10% to 100% to a policy's cost depending on the age they are at the time they take out the policy and the type of non-forfeiture benefit option that they buy. States may also require insurance companies to offer long-term care policies with a written offer of non-forfeiture benefit. Policy holders are given a choice of benefit options with different premium costs. Such options include reduced paid up policies, shortened benefit period policies and extended term policies.With these benefit options the company gives you a paid up policy when you stop paying your premiums. With a reduced paid up policy, your policy will have the same benefit period but with a lower daily benefit and with a shortened benefit period policy or an extended term policy the policy holder will have the same daily benefit period but with a shortened benefit period. This is all dependent upon how long the policy holder pays their premiums and the amount of premium they have paid in. A return of premium non-forfeiture benefit option may also be offered to policy holders and is generally the most expensive type of option. With a return of premium non- forfeiture option the company will pay back to the policy holder, all or part of their premiums that they have paid in if they drop their policy provided they have paid their premium for a certain number of years.
If you do not accept a non-forfeiture option some states will make it mandatory for a company provide a contingent non-forfeiture benefit option. A contingent non forfeiture option provides the policy holder protection if they are no longer able to pay their premiums due to the carrier increasing premiums to a certain level. With a contingent non forfeiture benefit option, if the premiums increase to a certain level the contingent benefit will become effective. The policy holder will then have a choice to either reduce the benefits so that the premium stays the same or covert the policy to a paid up status. If the policy holder converts the policy to a paid up status they would have a policy that is equal to the premiums that they have paid in.
What happens if you stop paying your premiums on your Long-Term Care Insurance Policy? If you make the right choices early on you can avoid potential problems in the future. Ask a professional how to plan accordingly.
What happens if you stop paying your premiums on your Long-Term Care Insurance Policy? When you purchase a long term care insurance policy it is important that you make a long term commitment to pay the premiums for an extended period of time. If you stop paying your premiums it is likely, as with most types of insurance coverage, that your policy will be canceled therefore loosing all premiums that have been paid in. Having non- forfeiture benefit options added to your policy will help protect the policy holder but it can be very expensive.
Some companies do offer a non-forfeiture benefit option to protect the policy holder from loosing premiums paid in when canceling a policy. A non-forfeiture benefit option offers the policy holder protection if they decide to cancel their coverage for whatever reason. A non-forfeiture benefit option can add 10% to 100% to a policy's cost depending on the age they are at the time they take out the policy and the type of non-forfeiture benefit option that they buy. States may also require insurance companies to offer long-term care policies with a written offer of non-forfeiture benefit. Policy holders are given a choice of benefit options with different premium costs. Such options include reduced paid up policies, shortened benefit period policies and extended term policies.With these benefit options the company gives you a paid up policy when you stop paying your premiums. With a reduced paid up policy, your policy will have the same benefit period but with a lower daily benefit and with a shortened benefit period policy or an extended term policy the policy holder will have the same daily benefit period but with a shortened benefit period. This is all dependent upon how long the policy holder pays their premiums and the amount of premium they have paid in. A return of premium non-forfeiture benefit option may also be offered to policy holders and is generally the most expensive type of option. With a return of premium non- forfeiture option the company will pay back to the policy holder, all or part of their premiums that they have paid in if they drop their policy provided they have paid their premium for a certain number of years.
If you do not accept a non-forfeiture option some states will make it mandatory for a company provide a contingent non-forfeiture benefit option. A contingent non forfeiture option provides the policy holder protection if they are no longer able to pay their premiums due to the carrier increasing premiums to a certain level. With a contingent non forfeiture benefit option, if the premiums increase to a certain level the contingent benefit will become effective. The policy holder will then have a choice to either reduce the benefits so that the premium stays the same or covert the policy to a paid up status. If the policy holder converts the policy to a paid up status they would have a policy that is equal to the premiums that they have paid in.
What happens if you stop paying your premiums on your Long-Term Care Insurance Policy? If you make the right choices early on you can avoid potential problems in the future. Ask a professional how to plan accordingly.
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