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What Happens to Long-Term Care Premiums When One of the Couple Dies?

Some companies offer discounts on the premiums of couples. However, what would happen to the premiums if one spouse dies? Should the  living spouse get the premiums ?

In the event that one spouse dies, what would happen to the long term care premiums? Does the money go directly in the chest of the insurance provider? Or it will be transferred to the premiums of the living spouse or survivor? This question troubles many couples who have purchased long-term care policies. The shared policies will lose its discount, but it may or may not be transferable to the living spouse and may or may not reduce the living spouse’s responsibility on the original premiums. Whereas, single, non-life policies revert the living spouse’s premiums without affecting the couple discount. A single, non-shared policy provides the best benefits even though the person paying the highest premium dies.

Spouse Survivorship

This works the same as the death benefit for couples, but is only offered on some individual plans. Both spouses must purchase coverage. If the spouse dies the date when the coverage commences, the premiums will be paid or extended for the survivor. Therefore, no premiums are owed.

Shared Benefits

 Other individual plans allow the transfer of benefits from one couple to another, either the same policy or different policies. This is by far a cost-effective policy type for couples. With other policies, it’s more practical to buy two separate four year policies than buy shared policies with 5 or 6 years coverage.

Extended Family Coverage

All group plans allow family members and other relatives of the employees to buy the same coverage, provided that all applicants will go under medical underwriting. Some individual policies can pass on discounts for extended family member applying at the same time.

Shortened Pay Periods

Some plans allow policies to be paid with fewer premiums. This includes single premium plans that can be paid in the allowed years, and can also be paid when the policyholder reaches the age of 65. Always read the contract carefully to see if these provisions are applied or not.

Non-forfeiture

The non-forfeiture means that you will get some outstanding benefit if the policy lapses or you die before getting the claims. Some states require insurance companies to automatically include non-forfeiture on all policies. The non-forfeiture normally makes the policy more expensive, but it gives better benefits in the long run. This allows the policyholders to get the lifetime maximum of claims equal to premiums paid or it may be a return of premiums at death. However, there is state regulation that requires insurers not to add extra costs on the non-forfeiture if the carriers increase premiums more than the certain percentage at certain age defined in the table of policy.

Death Benefit

Some group policies return the insured’s premiums if death occurs before age 65 or 70 and no claims were made. Many individual policies include a rider that allows a policy to return all premiums paid by the deceased policyholder. Some riders have requirements as to the age of policyholder and the number of years before the rider takes effect. Normally, the premiums that will be retuned may be less than the total claims paid for a period of time, but other policies may return all premiums regardless of the claims accrued.

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