Taking Care of Mom and Dad: Termination of Coverage

If LTC insurance is terminated, any benefits payable for institutionalization that began while the insurance was in force must continue without interruption after termination. This extension of benefits may be limited to the duration of the benefit period, if any, or to payment of a maximum benefit, and may be subject to any policy waiting period and all other applicable provisions of the policy.

As I've mentioned, applications for LTC insurance usually contain questions designed to determine your parents' health status. They may be asked whether they've had medication prescribed by a physician -- and to list the medications. If the medications listed are directly related to a medical condition for which coverage would otherwise be denied, and the policy or certificate is issued, it may not be later rescinded for that condition.

Companies are generally prohibited from post-claims underwriting, which means investigating medical records only after your parents enter the nursing home.

That said, some insurance companies will attempt to deny benefits based on inconsistencies in an application. If they reject your parents' claims, your parents will get their premiums back -- but by then it's usually too late to get coverage elsewhere.

The best time to clear up any information on the application is before your parents make a claim.