Like long-term disability insurance policies, it stands to reason that an insurance plan that is intended to pay insurance benefits for long-term care would be a relatively safe investment for your or a loved one’s future. After all, again like long-term disability insurance policies, many such policies are sold to people years before any anticipated long-term care needs present themselves. With premiums having been faithfully paid for many years, you might think there would not be a problem when the time comes to use the benefits. But, alas, we are talking about insurance companies and their motivation to deny claims.
Unfortunately, as Forbes magazine reported recently, the world of long-term care insurance can be fraught with red tape that can prevent claims from getting paid. And while long-term care policies have changed in how they are written over the years, every long-term care insurance policyholder should receive the benefits that they are due.
Part of the problem lies in the fact that policies from the 1990s were written differently than today’s policies. As a result, some people with older contracts—the ones that would appear to be the strongest because they have been paid into the longest – sometimes encounter significant trouble.
Various ways in which some insurers seek to deny claims include the following.
Some insurers require that the facility that is providing long-term care meet certain licensing and personnel requirements. Still others require that the facility meet certain criteria even if the criteria are not specified in the policy.
Something known as the “gatekeeper provision” is fairly common in older long-term care policies. This provision requires that a policyholder have a prior hospital say, a nursing home confinement or even both before claims are paid for long-term care. Many states, however, have outlawed these kinds of provisions.
Insurers have also been known to say that they will not pay benefits for so-called personal care such as errands a caregiver runs for the policyholder, or for tasks such as light housekeeping. A number of policies exclude care provided by family members, as well, but the policy’s specific wording should be carefully checked. Care provided by a spouse may not be covered, but that care given by, say, a grandson, could be.
At times, insurers will deny benefits because a policyholder neglected to pay premiums due to a cognitive impairment. However, many states require a certain period of time to cover such lapses, and if a physician’s statement can be obtained attesting to the cognitive impairment, the policy can be reinstated.
As you can see, long-term care insurance policies can present unique challenges or disabilities. Feel free to contact us for a free consultation regarding your specific situation.
