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Long-Term Care Insurance Lawsuits

by Whitfield Bryson | Bad Faith Insurance | Share

Perhaps you or a loved one decided to pay for long-term care insurance (LTC), which would allow for financial support in the event of needed care in your later years and protect your personal assets. Long-term care insurance helps pay for extended medical care to people who need help with the Activities of Daily Living (ADLs), whether in a nursing home, rehabilitation facility, or living with in-home assistance. For LTC benefits to become payable, the insured must show an inability to perform two or more ADLs, such as not being able to dress themselves or suffering incontinence.

The cost of skilled long-term medical care is extremely expensive (costing as much as $10,000 per month for some facilities), so the denial of benefits for a senior citizen well past working age is financially devastating. Long-term care insurance companies deny LTC claims for many reasons, primarily because old-age care has become ruinously expensive and insurers have lost billions of dollars on LTC policies.

Long-Term Care Means Long-Term Loss For Insurers

Although insurance policies designed to cover the costs of a nursing home or assisted living date back to the 1970s, insurers aggressively marketed them to baby boomers in the early 1990s, topping out at selling more than 700,000 per year in 2001 and 2002. About seven million policies remain in effect according to the insurance research firm Limra. And now insurers have lost billions of dollars on the policies.

Actuaries projected insurance companies would earn 7% to 8% a year from investing LTC premiums, but they had no experience projecting the behavior of long-term care policyholders. So what did they get wrong? First, LTC policyholders maintain their policies by paying their premiums at previously unseen lapse rates. Second, families are caring for their loved ones at home longer, so policyholders make claims earlier and live longer. Third, the cost of medical care and related medical expenses – including pharmaceuticals – continues to rise at previously unforeseen rates.

Long-Term Care Insurance Lawsuits

Once long-term care insurance policies began to show signs of huge failure for big insurance, lawsuits alleging insurers wrongly denied claims began to abound. Long-term care insurance lawsuits have been filed around the country. If you purchased long-term insurance coverage, you or your loved one may find it difficult to collect benefits because carriers are unable to pay claims. So instead they delay or deny valid claims.  The only way to get the policy benefits you’ve paid for is to file a bad faith insurance lawsuit with experienced trial lawyers like those of Whitfield Bryson LLP.


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