Dependency insurance, the criteria for choosing it well

Dependency insurance, the criteria for choosing it well

• Partial dependency must be covered

Some contracts only come into play in the event of total dependence. If the insured can still carry out certain acts of daily life on his own, the insurer pays him nothing. “However, this partial dependence is more frequent and already quite expensive, because it involves the passage of a person at home several times a day, to get up, go to bed or the toilet, for example”, recalls Céline Merlette, head of the individual market with an insurer. Prefer a contract that provides for the payment of 25% to 50% of the pension in the event of partial loss of autonomy.

• Beware of compensation conditions!

Most often, companies assess addiction according to a person’s ability to perform the six essential acts of daily living on their own (getting up, eating, etc.). Others are based on the Aggir grid, used for the payment of the personalized autonomy allowance (APA), which makes it possible to measure the degree of loss of autonomy of the applicant.

But almost always, in both cases, the insurer assesses alone (based in particular on the report of the attending physician) whether the condition of the insured justifies the payment of the annuity. He is both judge and party, which sometimes gives rise to disputes.

“Very few contracts, like ours, provide for the automatic payment of the annuity as soon as the insured person receives the APA for a GIR (degree of loss of autonomy) of 1 to 3. This is an asset, because the state of the insured is assessed independently by the departments of the department”, specifies JeanManuel Kupiec, adviser to the general manager at Ocirp (Common organization of pension and provident institutions).

• 70 to 75 years old

This is the maximum age of subscription for most long-term care insurance.

• Receiving a sufficiently high pension

Insuring for a pension of less than €500 per month (i.e. a maximum of €250 for partial dependency) is rarely sufficient: the costs of home help or accommodation in nursing homes in the event of heavy dependency are around €1,800 at more than 2000€ per month!

Check what the insurer provides in terms of revaluation. Because, over the years, the promised annuity risks losing its purchasing power if it is not properly revalued. “In general, the pension is reassessed at the same rate as the Agirc-Arrco pensions”, specifies Céline Merlette.

However, even this mechanism is no longer sufficient to combat inflation. This is all the more annoying in that if, later, you wish to increase the annuity provided for in your contract, you will have to submit again to the medical formalities.

• Have a minimum pension if you stop contributing

Dependency insurance is almost always “lost funds”. Like auto or home insurance: you’re covered only as long as you pay your premium. If you stop (because the premium has increased too much over the years or you no longer have the means to pay it) and become dependent, the insurer will not pay you the promised pension. Fortunately, some contracts provide a safety net.

If you have paid the installments for a certain number of years (8, 10 years, etc.), even if you stop paying, you can receive part of the annuity, which is quite modest: often less than 20% if you have contributed for 8 years , and less than 45% after 20 years of contributions.

• Vigilance on franchise deadlines

Most contracts provide for a waiting period of 1 to 3 months between the moment when the insurer recognizes the dependency of the insured and when he begins to pay the pension. “A contract that compensates immediately is preferable,” advises Virginie Dulchain, marketing director of a large insurance company.

Please note that insurers also generally provide for a waiting period: insurance does not come into play the year following subscription, nor even the first three years in the case of Alzheimer’s disease.

• Avoid overpriced options

Insurers offer additional guarantees, such as the “first cost” capital (a few thousand euros paid when the dependency is recognized by the insurer to fit out the accommodation, buy equipment, etc.) or the “respite for the carer”, a bonus of €500 per year intended to finance, for example, additional home help or temporary accommodation. But these options significantly increase the premium. The game is not always worth the candle.

• No misrepresentation!

Do not fill out the medical questionnaire lightly. “The insurers do not check the accuracy of the declarations when joining. But when the insured who has become dependent requests payment of the pension, sometimes 20 years later, they can check it. However, they have the right to reduce the amount of the annuity, in the event of an unintentional misrepresentation, and even to cancel the contract if the misrepresentation was voluntary”, warns Marion Chartier, head of pensions with the insurance mediator. In the latter case, the insured is not entitled to any benefit and cannot request reimbursement of premiums unnecessarily paid.

• The GAD label can be reassuring

Defined by insurers, the Guarantee of Dependency Insurance (GAD) label is awarded to contracts that offer minimum guarantees: annuity of at least €500 per month, maintenance of a reduced annuity if you stop paying contributions after 5 to 8 years… “This label provides a modest level of guarantee, but simplifies the comparison of contracts”, remarks Céline Merlette.

• Premiums that sometimes increase too quickly

The initial contribution is generally revalued (like the promised annuity) to take account of inflation. But the insurer is also free to increase it as it sees fit so that its contract remains profitable. “Insured persons are sometimes very surprised, and contact us, because their premiums have become too heavy, underlines the insurance mediator, Arnaud Chneiweiss. However, if the contract provides for this increase, it is not possible to to prevent.”

• The Aggir grid

It is used to assess a person’s degree of autonomy, on a scale of 1 (heavy dependence) to 6 (autonomous person).

• Do not wait too long if you have decided to subscribe

Before subscribing, you must complete a medical questionnaire. After the age of 65, you will often even have to accept a health examination. The older you are, the more frequent it is to have health concerns, and therefore to have to pay additional premiums or to face a refusal of insurance. Hence the interest of deciding quite early, around 60-65 years.

It also allows you to start with a lower membership fee, as it will be paid for longer. For example, for a monthly pension of €500, long-term care insurance can cost €25 per month when subscribing at age 60 and €43 at age 70.

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