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policy terms

What is an “incontestability provision” in an insurance policy?

By Asset Protection Planning, Elder Law, Estate Planning, Medicaid Planning, Medicare

Florida Statute §627.455 states:

Every insurance contract shall provide that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of 2 years from its date of issue except for nonpayment of premiums and except, at the option of the insurer, as to provisions relative to benefits in event of disability and as to provisions which grant additional insurance specifically against death by accident or accidental means.

The incontestability provision is thus the clause included in Florida life insurance policies which limits the time during which the insurer can challenge the validity of the policy to 2 years. Whether the challenge to the policy is based on alleged application fraud or an inability to enforce the policy, all claims must be filed within the 2-year period – or else, the claim is barred.

This provision has its origins in the mid-19th century, when insurance companies began including incontestability provisions to combat the perception that insurance companies would refuse to honor their policies over minor mistakes in a person’s life insurance application. Florida required the inclusion of incontestability provisions by law in 1955.

There is a possible exception to incontestability provisions: imposter fraud. Imposter fraud refers to the impersonation of a life insurance application by someone else during the medical examination of the application process – this type of fraud can be exempt from the incontestability provision.

To review your end-of-life and estate plan documents with experienced and dedicated estate and elder law attorneys, schedule an appointment with Bach, Jacobs & Byrne, P.A. at (941) 906-1231 today.

 

April 18, 2019
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Risk Adjustment Payments Suspended

By Medicaid Planning, Medicare

Risk adjustment payments to insurance companies had been funded by the federal government as part of the Affordable Care Act since 2014 as part of the ACA’s prohibition against insurance companies discriminating against individuals with chronic illnesses or pre-existing conditions. However, the federal government in early 2018 suspended the risk adjustment payment program, citing a recent Federal District Court opinion regarding the formula used to determine the size of the payments.

Some have expressed fears that insurance premiums could increase as a result of the suspension, while others argue that the risk adjustment payment program has already done more harm than good, through a bias against small insurance companies. The Centers for Medicare and Medicaid Services have asked the Federal District Court to reconsider its decision, and, in the meantime, the insurance market hangs tensely in the balance.

November 1, 2018
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Which common policy terms should I compare when purchasing long-term care insurance?

By Asset Protection Planning, Elder Law, Long-Term Care, Medicaid Planning

Long-term care insurance policies are not standardized from insurer to insurer, and thus the policies differ in many ways. There are, however, key provisions used across the board by Florida long-term care insurers. The American Health Care Association specifies that, in Florida:

-“Long term care policies… may cover at least 24 months of skilled, intermediate or custodial nursing home coverage supervised or recommended by a doctor.”

– “Long term care policies or certificates must provide at least one lower level of care, such as home health care or adult day care. The benefits for this lower level of care must have at least half the benefits of the nursing home care, in both the benefit period and the benefit amount.”

Beyond these, common policy points to be considered when comparing long-term care insurance policies include the following:

-Reimbursement levels

-Covered services

-Daily benefit amount

-Benefit period

-Payment options

-Inflation protection

Online, one can find many useful tools to help ensure that you are taking all relevant factors into consideration when purchasing long-term care insurance. Some of these tools include the free Long Term Care Partners, LLC “Benefits and Features Worksheet,” as well as the website for the National Association of Insurance Commissioners. An FAQs sheet from the state agency regarding Medicaid can be found here: https://ahca.myflorida.com/Medicaid/ltc_partnership_program/pdfs/Florida_LTCP_FAQs_7-26-11.pdf.

August 21, 2018
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