Long Term Care Policy Language ‘Confusing,’ Survey Finds

"[C]onfusing" policies are preventing many Americans from purchasing long term care insurance, the Detroit Free Press reports. Weiss Ratings Inc., which analyzes the finances of banks, insurers and brokerage firms, conducted a study of 25,000 premium rates offered by 35 long term care insurers and found that premiums varied from $300 to $900 a year for policies with the same benefits. Currently, only 7% of the population has long term care coverage, and Weiss says the market will continue to "stagnate" without "standardization" of policy language. For example, the Free Press reports that the definition of a policy's "elimination period" -- the time when policyholders have to pay medical expenses before benefits "kick in" -- varies from policy to policy. In addition, insurers do not have a "standard method" of payouts; some end payments after a predetermined number of years, while others permit policyholders to continue receiving benefits until all paid-in funds are depleted. "When comparing policies, they really need to read through them to see which benefits are included, how they're defined," Donna O'Rourke, a financial analyst with Weiss, said (Edgar, Detroit Free Press, 6/11).