Key Takeaways
- North Carolina requires a 10-day free look period for disability insurance policies
- Individual disability policies must include standard policy provisions
- North Carolina participates in the Long-Term Care Partnership Program
- LTC policies must offer inflation protection options and nonforfeiture benefits
- Producers must complete additional training to sell long-term care insurance
North Carolina Disability and Long-Term Care Insurance
North Carolina 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
North Carolina requires a 10-day free look period for individual disability insurance:
- Policyholder can return for full premium refund
- Begins when policy is delivered
- Applies to individual policies
Required Policy Provisions
North Carolina disability policies must include:
| Provision | Requirement |
|---|---|
| Grace Period | Minimum 31 days for annual premium |
| Reinstatement | Must allow reinstatement within 3 years |
| Notice of Claim | 20 days after loss begins |
| Time to Pay Claims | Promptly after proof of loss |
| Legal Actions | No earlier than 60 days after proof of loss |
| Time Limit on Certain Defenses | 2 years for contestability |
Renewability Types
| Type | Description |
|---|---|
| Non-Cancellable | Cannot cancel, cannot raise rates |
| Guaranteed Renewable | Cannot cancel, can raise rates by class |
| Conditionally Renewable | Can cancel for specific reasons |
| Optionally Renewable | Insurer can cancel at anniversary |
Definition of Disability
North Carolina recognizes different definitions:
| Definition | Coverage |
|---|---|
| Own Occupation | Cannot perform your specific job |
| Any Occupation | Cannot perform any job you're suited for |
| Split Definition | Own occ initially, then any occ |
Long-Term Care Insurance
North Carolina has comprehensive LTC insurance regulations:
Free Look Period
- 30-day free look for LTC policies
- Applies to all individual LTC policies
- Policyholder can return for full refund
Required Provisions
| Provision | Requirement |
|---|---|
| Renewability | Must be guaranteed renewable |
| Pre-existing Conditions | Max 6-month look-back period |
| Elimination Period | Must disclose 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
North Carolina Partnership Program
North Carolina 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 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 significant assets |
| Standard Medicaid rules | Enhanced asset protection |
Producer Requirements
To sell LTC insurance in North Carolina:
- Complete 8 hours of LTC-specific training initially
- Complete ongoing training for renewals
- Training must be NCDOI-approved
- Must complete before selling LTC products
How long is the free look period for long-term care insurance in North Carolina?
What is the primary benefit of purchasing a North Carolina Partnership-qualified long-term care policy?
How many hours of initial training must a North Carolina producer complete to sell long-term care insurance?