DELAWARE INSURANCE DEPARTMENT

What must be offered in a Long-Term Care Policy?

The option to purchase inflation protection of at least 5% compounded annually. This feature will increase the benefits of your policy over time. Therefore, the younger you are when you buy a policy, the more important it is for you to consider adding inflation protection. Keep in mind the cost of this additional benefit could add significantly to your premiums. If you decline to purchase inflation protection, you will be asked to sign a statement rejecting the coverage. Be sure you understand what you are signing.

Third party notification. To avoid a lapse of the policy for non-payment of premiums, companies must offer to notify a person you designate of the impending lapse.

The Option to purchase a nonforfeiture benefit which will allow you to receive some value for the money you've paid into the policy should you have to drop your coverage. A nonforfeiture benefit can add roughly 10% to 100% to a policy's cost. If you decline to purchase this benefit you will be asked to sign a statement rejecting the offer. If you reject the offer, the company is required to provide a "contingent benefit upon lapse." This benefit will take effect when your premiums increase to a certain level (based on a table of increases). You will then be offered the opportunity to accept: 1) a reduction in the benefits provided by the current policy so that premium costs stay the same; or 2) a conversion of the policy to paid-up status with a shorter benefit period. You may also choose to keep your policy and continue to pay the higher premium.