AboutEileen J. Tell Expertise I can help inform and educate people about long term care insurance and whether it is a product they should be considering. I can help them evaluate different policies or answer basic questions about long term care needs and costs. I have over 15 years experience developing and evaluating long term care insurance products and services and have worked with most of the leading companies in the field. I do not receive any commissions or fees from any companies, so my views are independent and neutral.
Question QUESTION: Hi Eileen,
My husband and I have recently applied for LTC insurance through a company endorsed by AARP in early October and we are in the "review" period. My question is... what if something happens during the review period that would require using LTC such as a result of a need for some surgery?
At the time of signing up, the question cames up... "do you have any scheduled surgery at this time? Truthfully, the answer is "no". But what if something happens during the review period that requires planning a surgery?
Thanks for any clarification. I am afraid to raise any red flags with my insurance agent.
ANSWER: I believe the AARP policy is offered through MetLife and they are a very good company. You should have received, along with your policy, a Schedule of Benefits page which shows all the coverage choices unique to you and your husband (your names would be on it). It should also identify a Coverage Effective Date (or they may possibly call it something slightly different). As long as your Coverage Effective Date is a date in the past (and it certainly should be or you would not be in your 30 day free look period), you are fine. Your coverage has begun. I'd call them and just ask them when your coverage became effective to verify especially if you can't find it on the schedule.
The purpose of the 30 day review period is for YOU to change your mind without risking loss of the premiums you paid. This is the first time you are seeing the entire policy (previously you just had the outline of coverage which is only a summary). So this is when you should read it over carefully and ask any questions in case you want to back out. But the "review period" does not give any rights to the insurer, only to you, so your coverage should begin the day you received the policy or possibly even earlier (some companies back date teh coverage start date to the application date or whenever you paid premium).
Do however check to make sure that there are no pre-existing condition exclusions in the policy. I don't think I have a recent AARP policy here to examine for you and most policies no longer have such an exclusion.
Also, keep in mind that the company has the right to rescind your coverage within the 1st 2 years if you go on claim and it turns out your need for LTC was based on a condition you had at the time you applied but for which you fraudulently misrepresented. For example if the application asked you if any surgery was recommended or planned and you said no when the answer was really yes, the company could refuse to pay that early claim under this provision. It is usually called Incontestibility so look for it in your policy and read it. Review your application to make sure you said everything truthfully and completely. If you end up needing surgery which then results in a need for LTC but the surgery was never contemplated at the time of application (e.g., god forbid you fall down tomorrow and break a hip and need LTC for recuperation after surgery), then you are fine. While many surgeries might require a post-hospital recuperation period, unless your LTC need is expected to last at least 90 days, it won't be covered by your LTC policy because the definition of LTC is a need expected to last at least 90 days. Also, if you need care in a skilled nursing home after a hospital surgery, Medicare (if you are old enough for it) very well may cover it.
If you want any additional specific advice, feel free to contact me again here or ejtell@yahoo.com. If you want me to review your policy for you, I'd also be happy to do so. I hae a neurotic interest in keeping up with how companies are writing their policies. But no obligation.
Good luck and I congratulate you and your husband on being foward thinking in planning ahead - not so easy to do. While it isn't completely up to date, the US gov't has a consumer education website www.longtermcare.gov that might have good and objective info.
Good luck.
ET
---------- FOLLOW-UP ----------
QUESTION: Thank you for the quick response Eileen. Actually AARP touts Genworth now rather than MetLife, but the situation is that my husband and I completed the "application" and this gives Genworth time (4-6 weeks) to go to our Dr's for our records, conduct a phone interview and memory test, etc.
We just don't have the final approval yet, thus no final policy has been issued. In the meantime, if some accident happens where hospital or surgery is required, can the company drop us?
We should be hearing soon about whether we are "coverable".
-Nell
Answer First, my apologies for misunderstanding where you were in the process. When you said "review period" I thought you meant YOUR review of their policy, not their review of your application. ALso, I did forget that the AARP business has recently shifted from Met to Genworth so you are right again there. Guess i needed another cup of coffee before answering you!
Given this new information, you should re-read the CAUTION statement on your application. It is typically included with your signature authorizing release of medical information for their review. That should indicate whether or not you have what is called "temporary" coverage. Usually if you paid a premium at the time the application was taken, then you do have temporary coverage in case of an accident during the time you are waiting to be underwritten. If you did not, then you might not be covered if your health changes while they are underwriting you. See if there is any language that speaks to what happens if you have a change in your health status before they complete their application review? It usually is addressed in the application. If not, email your agent and ask him or her to email you back what the policy is. Focus on talking about "god forbid if there is some accident" rather than mentioning surgery as it sounds like you might have something planned and you don't want to raise that flag.
I have a colleague at Genworth so I've left a VM with her to ask her the question. She is the compiance officer so would know the policy they follow in this regard. Some companies will put your coverage in effect as long as whatever event befalls you in the interim happens after they have rendedered their decision to accept you already but prior to when you are so notified. Other companies reserve the right to require you to maintain your "good health" both at the time you apply and when your coverage becomes effective, so a change in health during that "review period" could prevent your coverage from taking effect. Each company has different rules, so unless it is crystal clear in the application language, ask the agent and I'll follow up with you as well once i hear back from my colleague at Genworth.
