As Baby Boomers aged, there was a boom in the sale of long-term care insurance during the 1990’s. Now, however, an ever increasing portion of our population, which is living longer and longer, is seeking protection under their long-term care policies. One insurance company executive described the situation as follows: “The long-term care party of the 1990s gave us one hell of a hangover in the 2000’s.”
Long-term care insurance is a contract or policy of insurance which promises, in exchange for the timely payment of premiums, coverage for expenses of long-term care, such as the costs of a nursing home or assisted living facility. As more and more Americans with long-term care insurance enter these facilities, the insurance industry is faced with making good on their promises. Some insurers, however, have miscalculated the profitability of certain long-term care insurance products. For example, many insurers fighting to get into the “long-term care party of the 1990s” overestimated policy lapse rates and miscalculated the mortality rates for the target population. Now, during the “hangover,” insurers too commonly attempt to refuse payment of legitimate claims, sometimes on a global scale.
On March 15, 2006, Penn Treaty President and CEO issued a news release indicating that a “review is showing us that our policyholders remaining on claim beyond three years (particularly on policies issued prior to 2002) appear to be living longer than we had previously anticipated, which will likely cause us to pay higher future benefits due to the expanded duration of these claims.”
Denial of a long-term care claim or the loss of one’s long-term care coverage can be devastating. Imagine becoming accustom to life in a long-term care facility only to one day receive a letter from your long-term care insurer stating that it is “no longer medically necessary” that you or a loved one continue to receive nursing home care, and that benefits will end. This is a common exclusion cited by long-term care insurers to deny benefits. Without benefits, the elderly individual must tap into his or her assets to continue to pay for care, or must burden their family for assistance. Ultimately, once one’s assets are exhausted, he or she is forced to seek government assistance.
If you or a loved one has had their claims for long-term care benefits denied or their policy rescinded, contact the trial attorneys at Spangenberg, Shibley & Liber, LLP for a consultation, and protect your legal rights.