Given the high cost of nursing home care, assisted living, or home health care, many people have purchased long-term care insurance with the expectation that it will cover the costs of their care should they ever need such services. Unfortunately, those expectations have not always been met because insurance companies have challenged claims and shown reluctance to pay benefits under long-term care policies.
There are a wide range of reasons that insurance companies may raise as the basis for denying claims; and while some excuses are valid, in other situations, insurers have unfairly delayed payments, denied claims altogether, or discontinued paying benefits under long-term care insurance policies. It is important to note that not all LTC insurance policies are identical. As the senior health care industry has developed, many older policies did not include services such as assisted living facilities or even home health care aides. Poorly drafted contracts can create ambiguities that the insurance provider may try to use to serve their own interests, at the expense of policyholders who have paid premiums in good faith for years.
While the friction points can involve a broad range of issues, some of the most common reasons insurers delay or refuse to pay include:
- Delaying payments pending further information: Filing the proper paperwork is a cumbersome, but necessary process. Unfortunately, the insurance company may send a seemingly endless stream of requests for more information before agreeing to approve a claim. Some people are able to anticipate the process and provide information that the policy requires up front inclusive of assessments of the ability to perform activities of daily living or neurocognitive evaluations. In submitting claims, it is important to be persistent and consult with an attorney if the insurance provider is dragging its feet.
- Denying a claim based upon information gathered in an assessment: In some instances, the insurance company will send a person out to assess the policyholder to determine the need for services. It is important for seniors to have a family member or trusted friend alongside them during the assessment. It is often difficult for a senior to know how to respond to questions. Pride may also become a factor, as the policyholder may be reluctant to admit the need for assistance. Investigators are trained to obtain statements during these assessments to provide a basis to deny claims.
- Missed premium payments: Due to the potential for cognitive impairments such as Alzheimer’s disease, it is important for seniors to arrange with their insurance companies to send lapse notices to a designated representative (often a family member of the policyholder) in cases where a premium payment is late. Because it is well known that seniors may miss payments as the need for assistance draws near, many policies have requirements and a time-period to allow the insured to make up missed payments.
If you or your loved one is being treated unfairly by an insurance company, it is vital to speak with a focused lawyer with a strong command of the terminology and issues that arise in relation to long-term care insurance, including knowledge of insurance bad faith law. After years of making payments with the expectation of receiving benefits in times of need, your good faith should not be tarnished by legal technicalities that a lawyer may help you to overcome.