What Happens to My Long Term Care Benefits if I Stop Paying My Premium?

If you stop premium payments, with most long term care insurance policies, your policy terminates. Most policies offer an option called “non-forfeiture” which preserves a part of your benefits even if you should stop paying premiums. Typically, this option offers you a benefit equal to the premiums you have or the dollar equivalent of three months of care at a nursing facility, whichever is greater. And also typically, you need to keep the policy in force at least three years before you’re entitled to this “non-forfeiture” benefit, usually available at an additional cost.
Many policies also include “Contingent Benefit Upon Lapse” as a consumer protection. This means that if your current premium increases over a certain level outlined by the National Association of Insurance Commissioners, and you decide you cannot afford the new premium, you can choose one of two benefits. One benefit provides a reduction of your current policy’s benefits so that your premium will not increase. The other benefit allows you to reduce your policy’s benefits by lessening the original total amount of coverage, thereby converting the policy to a “paid up” status. Of course, you may elect to keep your policy’s benefits the same and pay the higher premium.