Long-term care insurance covers long-term personal and custodial care services, including in a variety of settings such as your home, a community organization or other facility. Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with their activities of daily living when they are unable to perform these activities.

Individuals who have these policies do not currently receive periodic notification from their insurer that these benefits are available. Without notification, these individuals and their families can easily lose track of the existence of the benefits, especially if the insured suffers from cognitive impairment. These individuals and families likely end up paying for care despite having this insurance or doing without when, in fact, benefits are available.

Recently, Governor Brown signed Senate Bill 575, authored by Senator Carol Liu. Sponsored by Insurance Commissioner Dave Jones, the new law requires long-term care insurers to provide annual notification of the availability of non-forfeiture benefits and contingent benefits to the insured and the insured’s designated backup contact. This notification will give seniors and their loved ones a clearer understanding of benefits available to them. Here is the press release from the California Department of Insurance:

Seniors gain greater consumer protections under new law

SACRAMENTO, Calif.- New consumer protections were ushered in yesterday when Governor Brown signed Senate Bill 575, authored by Senator Carol Liu. Sponsored by Insurance Commissioner Dave Jones, the new law protects consumers, specifically the elderly and their caregivers by requiring long-term care insurers to provide annual notification of the availability of nonforfeiture benefits and contingent benefits to the insured and the insured’s designated backup contact.

“This notification will give seniors and their loved ones a clearer understanding of benefits available to help finance and provide long-term care,” said Commissioner Jones. “Without notification, individuals and their families can easily lose track of the existence of the benefits and may end up paying for care or missing out on benefits that are available to them. I would like to thank Senator Liu for authoring this important bill.”

Consumers may stop making premium payments because they can no longer afford them. Although the long-term care benefits may still be available to the consumer even after they stop making payments, the benefits may not be utilized by the consumer until years after the policy has lapsed, which is why consumers may forget the benefits are available for use.

SB 575 earned strong bipartisan support in the Legislature and was supported by the Congress of California Seniors, California Advocates for Nursing Home Reform, the California Commission on Aging, California Retired Teachers Association, California Health Advocates, the American Federation of State, County, and Municipal Employees, National Association of Social Workers, and the Arc and United Cerebral Palsy California Collaboration.