New Jersey Long Term Care Policy
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Policy Requirements
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The minimum benefit period for a long-term care policy sold in New Jersey is 24 months. There is also a requirement for a 30-day free-look period. This period allows consumers to examine the long-term care policy they've purchased and return it with a full refund for any reason. If the policy has a pre-existing limitations clause, it must be clearly marked in its own section in the policy. Companies can't cancel policies due to age or ill health. New Jersey also forbids policies that require a hospital stay to utilize benefits.
Partnership Policies
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New Jersey has joined with a number of other states as part of a Long-Term Care Partnership Program. The program allows you to purchase a long-term care policy that meets certain requirements. One requirement is including inflation protection in your policy, which increases the benefit amount from three to five percent per year, if you are under 76 years old. Another requirement is that the policy is tax-qualified, which means some or all of the premiums paid are deductible on your federal income tax. The specific amount varies by age, and changes each tax year. If you exhaust all the benefits of your policy, you can apply for Medicaid while keeping some of your assets. Medicaid normally requires spending all of your assets to qualify.
Purchasing a Partnership Policy
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There is a limited number of companies approved to sell partnership policies in New Jersey. Their insurance agents undergo special training, and companies must meet strict standards set by the state. Standards include prominently displaying the word "Partnership" on partnership policies and reporting regularly to the New Jersey Secretary of Health and Human Services on when benefits are paid out, the amount of benefits and when partnership policies are terminated. The program is administered by the New Jersey Department of Human Services.
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