New rule protects consumers from unintentional long-term care policy lapses
This week, we adopted a rule that affects consumers who have long-term care insurance policies and their families. If you are not familiar with long-term care insurance, it pays for the polcyholder to stay in a long-term care facility when their health meets certain criteria. Many consumers purchase polices years or decades before they need it. Because the policies are in place for so long, sometimes people forget to pay if their mental or physical health declines, such as cases of dementia. We started the rulemaking because of stories like this--a consumer filed a complaint with us about her mother’s long-term care policy, which had lapsed because the mother had stopped paying the premiums without her daughter’s knowledge. The daughter found out the policy had lapsed when her mother needed long-term care and the claim was denied. The company said it had notified the mother and the daughter that the policy was canceled, but neither of them received the notice. The new rule strengthens ...