Annual reviews are critical to the health of your long term care (LTC) insurance plan.  If you own long term care insurance, be sure to review your policy every year. An annual review provides an opportunity for you to re-examine your coverage, analyze relevant federal legislation that may impact the tax treatment of your premiums, and assess any changes in your personal financial situation.

Evaluate Your Benefits

Once a year, it’s important to review the following: your existing contract benefits, the triggers that must be satisfied to receive benefits, and the procedures for filing a claim. If you’ve chosen an inflation protection option, you may want to evaluate your current benefits to see how much they’ve grown in light of rising health care costs. Your policy may also carry a provision to upgrade (step-up) your contract without underwriting.

If yours is a tax-qualified policy, it is important to keep pace with federal legislation that has passed or is pending. Be sure to consult your tax professional about how any changes might affect you.

Look at Now and Then

An annual review also gives you a chance to examine your current financial situation and determine what impact recent life circumstances might have on your existing long term care insurance plan. It is important to make sure your plan meets both your short-term and long-term financial goals.

Staying current also means knowing how your long term care coverage fits into your entire estate plan. You should review the policy in the context of your overall wealth transfer strategy. Reviewing your coverage may motivate you to create an appropriate estate plan, if you don’t have one, or to revise your existing plan. 

Stay Involved

Revisiting your policy each year is important to help ensure your coverage continues to meet your needs. While the review may only require one or two hours of your time each year, the resulting benefits can be substantial and long-lasting.