Key Takeaways
- Pennsylvania requires a 10-day free look period for disability insurance policies
- Individual disability policies must include a 31-day grace period for premium payment
- Pennsylvania participates in the Long-Term Care Partnership Program for Medicaid asset protection
- LTC policies must offer inflation protection options and nonforfeiture benefits
- Pennsylvania does not have a state-mandated disability insurance program like some states
Pennsylvania Disability and Long-Term Care Insurance
Pennsylvania 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
Pennsylvania 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
Pennsylvania disability policies must include:
| Provision | Requirement |
|---|---|
| Grace Period | 31 days for annual premium, 10 days for other modes |
| Reinstatement | Must allow reinstatement within 3 years |
| Notice of Claim | Written notice within 20 days after loss begins |
| Time to Pay Claims | Immediately upon receipt of proof of loss |
| Legal Actions | No earlier than 60 days after proof of loss |
Cancellation Requirements
For guaranteed renewable policies:
- Cannot cancel for health reasons
- Can only cancel for nonpayment or fraud
- Written notice required for cancellation
Pennsylvania and State Disability
Unlike some states (California, New Jersey, New York, Rhode Island, Hawaii):
- Pennsylvania does NOT have a mandatory state disability insurance program
- Coverage is through private insurance or employer plans
- Workers' compensation covers work-related injuries
Exam Tip: Remember that Pennsylvania does NOT have state-mandated disability insurance like California's SDI program.
Long-Term Care Insurance
Pennsylvania 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 |
| 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
Pennsylvania Partnership Program
Pennsylvania 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 home and other assets |
| Standard Medicaid rules | Enhanced asset protection |
Producer Requirements
To sell LTC insurance in Pennsylvania:
- Complete 8 hours of LTC-specific training initially
- Complete 4 hours of LTC training for each renewal period
- Must complete before selling
- Training must be approved by PID
How long is the free look period for long-term care insurance in Pennsylvania?
What is the primary benefit of purchasing a Pennsylvania Partnership-qualified long-term care policy?
Does Pennsylvania have a mandatory state disability insurance program?