UNUM and CNA – are these long term care insurance policies any good?

Every time I am asked if a policy or company is “any good”, I always hesitate on a response. I never know what other people mean by “any good”…. I get asked this question a lot, by the way.

My standard answer is this: your policy is good so long as you keep paying premiums. These policies cannot be cancelled by the insurance company – by contract, the insurance company must:

1) honor the policy at the point of claim if it is in good standing with premium and the person is benefit eligible, OR
2) they must allow another company to buy the block of business and honor it (call “re-insurance market” in the industry lingo). AND…
3) if the company truly goes belly-up and no one buys the block of business, then there is a state guarantee program in every state that will back the policy up to a limit set by the state. So think “FDIC for banks” – the FDIC backs your funds in a bank up to 100K if the bank goes under. The state guarantee association is the equivalent in the insurance world.

And now…to UNUM and CNA specifically. These were largely worksite policies – sold inside the work place. So worksite policies are not regulated on price increases the same way non-worksite policies are. So it is possible these will see more rate increases as the years go by than a non-worksite policy. However that is not definitely so. Many of the worksite policies were bought/sold without an inflation growth built in. Policies that have not growth are some of the least likely to see rate increases.

Also, CNA and UNUM no longer offer new long term care policies – they stopped offering new policies several years ago. So while you can no longer buy a policy thru them, it does not mean your policy is “bad”. You bought your coverage when you were younger, healthier and much cheaper than today. When in doubt on this, reach out to an agent and get price comparisons with today’s policies. I think you will be surprised to find how “affordable” your policy is compared to the current cost -per-unit. Don’t take my word for it though – it never hurts to get a current comparison.

As far as claims go, these companies are no worse (or better) than other companies processing claims. As I have written about else where, the claim process is just document intensive. You can simply let the document process move along without any monitoring or assistance and hope for the best on a claim. Or you can actively manage that process and increase your odds of a speedy and successful claim.

I recommend folks get a copy of the step-by-step claim book HERE so you know how the claim process works and can keep your claim out of the ditch.

Stana Martin, PhD, founded Mrs LTC to provide a top-quality resource for clients and customers who need help with long term care claims or insurance comparisons.