Key Takeaways
- Arizona requires a 10-day free look period for disability insurance (20 days for seniors)
- Individual disability policies must include specific required provisions including grace period and reinstatement
- Arizona participates in the Long-Term Care Partnership Program providing Medicaid asset protection
- LTC policies must offer inflation protection options and nonforfeiture benefits
- Producers must complete 8 hours of LTC-specific training before selling LTC insurance
Arizona Disability and Long-Term Care Insurance
Arizona has specific regulations for disability income insurance and long-term care insurance that protect consumers and ensure adequate coverage.
Disability Income Insurance
Free Look Period
Arizona requires a free look period for individual disability insurance:
| Policyholder Age | Free Look Period |
|---|---|
| Under 65 | 10 days |
| Age 65 and older | 20 days |
- Policyholder can return for full premium refund
- Begins when policy is delivered
Required Policy Provisions
Arizona disability policies must include:
| Provision | Requirement |
|---|---|
| Grace Period | 31 days for premium payment |
| Reinstatement | Within 3 years upon payment and proof of insurability |
| Notice of Claim | Written notice within 20 days of loss |
| Claim Forms | Furnished within 15 days of request |
| Proof of Loss | Submit within 90 days of loss |
| Payment of Claims | Immediate upon receipt of proof |
| Legal Actions | Not before 60 days or after 3 years |
Renewability Provisions
Types of disability policy renewability:
| Type | Description |
|---|---|
| Non-cancelable | Insurer cannot cancel or raise rates |
| Guaranteed Renewable | Cannot cancel, may raise rates by class |
| Conditionally Renewable | May terminate under specific conditions |
| Optionally Renewable | Insurer may terminate at anniversary |
Exam Tip: Non-cancelable policies offer the strongest protection because the insurer cannot raise premiums as long as you pay on time.
Long-Term Care Insurance
Arizona has comprehensive LTC insurance regulations:
Free Look Period
| Policyholder Age | Free Look Period |
|---|---|
| Under 65 | 30 days |
| Age 65 and older | 30 days |
- 30-day free look for ALL LTC policies regardless of age
- Policyholder can return for full refund
- Longer than most other insurance products
Required Provisions
| Provision | Requirement |
|---|---|
| Renewability | Must be guaranteed renewable |
| Pre-existing Conditions | Max 6-month look-back period |
| Elimination Period | Must disclose clearly |
| Benefit Triggers | Must define clearly |
| Inflation Protection | Must offer option |
| Nonforfeiture | Must offer option |
Inflation Protection Options
Insurers must offer at least one inflation protection option:
- Compound inflation (3% or 5%)
- Simple inflation
- Consumer Price Index adjustment
- Benefit increase option (future purchase)
Arizona Long-Term Care Partnership Program
Arizona participates in the Long-Term Care Partnership Program:
How It Works
- Purchase a Partnership-qualified LTC policy
- Use benefits for care
- If benefits exhaust, apply for AHCCCS (Arizona Medicaid)
- Asset protection - Keep assets equal to benefits received
Example
| Without Partnership | With Partnership |
|---|---|
| Spend down to $2,000 | Protect assets up to benefits paid |
| Lose most assets | May keep home and savings |
| Standard AHCCCS rules | Enhanced asset protection |
Producer Requirements
To sell LTC insurance in Arizona:
- Complete 8 hours of LTC-specific training initially
- Complete 4 hours of LTC training each renewal period
- Training must cover LTC products, suitability, and Arizona rules
- Must complete before selling LTC insurance
How long is the free look period for long-term care insurance in Arizona?
What is the primary benefit of purchasing an Arizona Partnership-qualified long-term care policy?
How many hours of initial LTC-specific training must Arizona producers complete before selling long-term care insurance?