4 Reasons Why Long Term Care Claims Get Denied?

Question 3This week has been devoted to Long Term Care Insurance  (LTCI).  If you want to get a running start at today’s post, I invite you to check out my previous comments at, Look Before You Leap Into The Long Term Care Insurance Pool, Do You Know What Your LTCI Requires? and Is Your LTCI Portfolio Up To Date?

Like all other insurance policies, LTCI policies are “contracts of adhesion.”  That means that one party, the insurance company, draws up the contract and the other party, you, are given time to read the contract.  If you do not act during your “free look” period, the insurance company can assume that you understand and agree to the terms of the contract.

Once you have “adhered” to the contract, both parties are required, and expected, to live up to their promises.  If one side does not perform as agreed to, the other side has legal options.

Sadly, many people do not understand the contractual relationship that is formed when they buy insurance.  They do not take the time to read their policies until there is a problem.

Over the past 5 years I have heard about how many times the “evil” insurance companies have declined claims.

Only a fool would say that insurance companies wrongly decline a claims.   However, that does not happen as often as politicians with an agenda would have you believe.  Every state has a department of insurance with a consumer affairs division.   That division is responsible to make sure that justified claims are paid.

Please note that I said, “justified claims.”  Contrary to many people’s understanding, the consumer affairs division of your department of insurance is not pro-consumer and anti-insurance company.  They act as a neutral arbitrator.

Your state department of insurance is not going to make your insurance company pay a bill for which it is not responsible.  The first thing they will do is verify that both parties, you and the insurance company, have fulfilled their responsibilities.

In most cases where an insurance company fails to pay a bill, it is because the insured did not fulfill his responsibility.  In this post I want to stress why it is so important for you to read your policy and understand what is required from you.  If you do, it is highly unlikely that you will ever have a problem with your insurance company.

You have 3 responsibilities that must be fulfilled before any claims will be paid.


There are 6 functions that doctors measure in order to determine how well you can care for yourself.  They are called, “Basic Activities of Daily Living”  (ADL).

Most LTCI policies require you to be unable to perform at least 2 of them without help or supervision.  Those activities are…

  1. Bathing
  2. Toileting
  3. Eating
  4. Dressing
  5. Transferring from one place to another
  6. Personal Hygiene

Most LTCI plans also pay a claim if you are a danger to yourself, or others, because of mental decline, such as Alzheimer’s disease.

A licensed physician must say, in writing, that you are unable to perform at least two of the 6 ADLs or are showing signs of Alzheimer’s disease.  Either of those will “Trigger” your ability to make a successful claim.

Often an individual is frustrated because their LTCI claim is denied.  They do not remember that LTCI will not pay just because they have gotten older and do not feel like they did 50 years ago.

Until your doctor is willing to sign an affidavit that in his opinion you are unable to perform 2 of the 6 ADLs or are showing signs of cognitive decline, as indicated in advanced Alzheimer’s disease patients, your LTCI will not pay you anything.


It is not enough for your doctor to say that you are unable to perform 2 of the 6 ADLs or have cognitive challenges.  Your doctor must also swear that, in his opinion, your condition is going to last at least 90 days.

If you are expected to recover your ability to function in less than 90 days, you are said to require “Short Term Care.”

Your LTCI policy will not pay any benefits for Short Term Care.  There are other types of insurance to help you through a period of recovery.  May people rely on Critical Illness, Accident Supplement or Short Term Disability insurance to help them with this problem during their working years.

You can save yourself the frustration of a denied LTCI claim by remembering that it does not cover Short Term Care.


Not only are you responsible for getting a doctor’s affidavit that you meet the “Triggering” requirements for a claim and they are expected to last at least 90 days.  Often you are required to present the insurance company with a written Plan of Care.

There is an independent professional that you can hire to help you.  That person is called a Plan Coordinator.

A Plan Coordinator is normally familiar with what is required from your insurance company.  He/She will work with you, your doctor and your insurance company to prepare the written plan of care, just for you, that will satisfy your insurance company.

You are not required to use the services of a Plan Coordinator.  However, many LTCI policies include a benefit that provides you with the money to hire a Plan Coordinator.

Just remember that you will not get any benefits from your insurance company until they receive an acceptable Plan of Care.


There are two types of LTCI plans.   The first type is called a
“Reimbursement” plan.  It will reimburse you for Long Term Care expenses from approved vendors.

“Reimbursement” plans are the most common.  If your LTCI claim is denied, it may be because you have submitted a claim for them to reimburse you for using a vendor who is not approved.

There is a second type of LTCI plan.  It is called a “Cash” plan.  If you fulfill are the Triggers above and are eligible to go “On Claim.”  It will pay you an amount of cash each month that you can use as you see fit.

You can use the money to hire an unapproved vendor or reimburse family members for taking time off work to care for you.


The point behind today’s post is that you need to read your LTCI policy to understand what is required from you.

Many people think that all they need to do is to pay their premiums.

Yes, the premiums must be paid but there are additional responsibilities they have.  If you forget about them, you will be frustrated when your LTCI claim is delayed or denied.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s