If you have a long-term care insurance policy, you've made a significant financial investment that can help preserve your assets, prevent your family from going broke, and provide you and your loved ones with a sense of security about the future. You certainly don't want to lose coverage because you forget to pay a premium! A 2015 study from Boston College's Center for Retirement Research reveals that of the 25% of policyholders whose policies lapse, those who forget to pay premiums, a common occurrence among the cognitively impaired, are precisely those individuals who are most likely to need the long-term care going forward.
Most people buy long-term care insurance when they are in their 60s, anticipating they will need it when they are in their 80s or beyond. The underwriting for traditional long-term care policies is highly restrictive. When a policy lapses, it may be difficult or impossible to find replacement coverage.
If you have a long-term care policy, my recommendation is that you contact your insurance company and request that a second party - your spouse, adult child, trusted friend - receive duplicate premium notices. This way, if you suffer any cognitive impairment, or the bill does not get delivered or is inadvertently tossed as junk mail, your back-up individual will be able to remind you, or pay the bill.
Read the Center for Retirement Research study brief and download the full study here.