Key Takeaways
- Alabama requires a 10-day free look period for disability insurance policies
- Long-term care insurance has a 30-day free look period in Alabama
- Alabama participates in the Long-Term Care Partnership Program for Medicaid asset protection
- LTC policies must offer inflation protection options
- Producers must complete 8 hours of LTC-specific training before selling
Alabama Disability and Long-Term Care Insurance
Alabama 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
Alabama 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
Alabama disability policies must include:
| Provision | Requirement |
|---|---|
| Grace Period | Minimum 31 days for annual premium |
| Reinstatement | Must allow reinstatement within specified period |
| Notice of Claim | 20 days after loss begins |
| Time to Pay Claims | 30 days after proof of loss |
| Legal Actions | No earlier than 60 days after proof of loss |
Disability Definitions
| Type | Definition |
|---|---|
| Own Occupation | Unable to perform your specific job |
| Any Occupation | Unable to perform any job for which suited |
| Partial Disability | Reduced benefits for partial disability |
| Residual Disability | Benefits based on income loss percentage |
Alabama Does Not Have State Disability Insurance
Unlike California and a few other states, Alabama does not have a mandatory state disability insurance program. Disability coverage in Alabama is:
- Through private insurance
- Employer-sponsored plans
- Individual policies
- Social Security Disability (federal program)
Long-Term Care Insurance
Alabama follows NAIC Long-Term Care Insurance Model standards:
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 |
| Elimination Period | Must disclose clearly |
| Inflation Protection | Must offer option |
| Nonforfeiture | Must offer option |
| Outline of Coverage | Must provide before sale |
| Suitability | Must complete suitability form |
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
Alabama Partnership Program
Alabama 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
Producer Requirements
To sell LTC insurance in Alabama:
- Complete 8 hours of initial LTC-specific training
- Complete 4 hours ongoing training each licensing period
- Topics include:
- LTC policy features and benefits
- State and federal regulations
- Suitability determination
- Consumer protections
What is the free look period for long-term care insurance policies in Alabama?
How many hours of initial training must producers complete to sell LTC insurance in Alabama?
What is the primary benefit of purchasing an Alabama Partnership-qualified long-term care policy?