What You Can Do If You Are Having Trouble With A LTCI Claim

Confused 1Over the weekend I was asked why an individual was not able to get the full $142,000 from his 95 year-old mother’s Long Term Care insurance (LTCI) policy.

The person who complained forgot a few things.  In this post, I am assuming that the person who asked me is actually trying to understand and is not just assuming that all LTCI policies work the same.


Some people think that LTCI will pay benefits just because an insured gets old.  That is not true.  Long Term Care policies will only pay after a triggering event.

Some plans, usually offered as riders on life insurance but commonly represented as LTCI protection by ignorant insurance agents, only pay benefits if a doctor is willing to certify that the insured has a terminal illness and is expected to die within a year or two.

True LTCI policies normally trigger a benefit if the insured is unable to perform at least 2 of 6 Activities of Daily Living without help or supervision or suffer “cognitive” changes, such as Alzheimer’s disease.

In addition, before a claim will be paid, a doctor’s certification must be given to the insurance company that the condition is expected to last 90 days or more, and an acceptable plan of care must be created and submitted to the insurance company.

Until all this has been certified and completed, the insurance company will not pay any benefits.


The first thing he forgot is that LTCI is an insurance policy and not a savings account. He has no account worth $142,000. That money is only there if she needs to use a claim.  If his mother had wanted to use something that has attributes of both savings and LTCI, she would have elected to use an Annuity/LTCI hybrid.

The only problem with them is that many of them require an initial deposit of $50,000 or more.

He has not given us with full details to decide if his problem is legitimate or confusion on his part. We have to review the actual policy.


LTCI is not standardized. Each company covers only certain risks. Today’s policies have more comprehensive coverage than those taken out 20 years ago. It is highly possible that the policy he has only covers people who are admitted to a nursing home and he is trying to take care of his mother at home. If that is the case, there is no cause for a claim.

He also does not say what Elimination Period is in the contract. Some people elect a 365 day elimination period to keep the premiums low. If that is the case, he and his family can start the claim process now but his mother has to remain eligible for 365 days.

Also, some policies count calendar days after a triggering event. Other policies only count days of confinement, or when LTC services were actually performed. A plan with a 365 day elimination period could take as long as 3 years before it is going to pay benefits if that is the type of plan he wanted.

LTCI COMPANIES ARE NOT PERFECT – (but then again, neither are consumers)

Anytime a human is involved, mistakes and delays can happen.  Before this gentleman continues to complain, he needs to know that there are options, to whom he can appeal for help, that have power and influence over insurance companies.  Here are just a couple.

I.  If he feels that he is getting a run-around from his insurance company, have him contact his state’s Department of Insurance. One of their functions is to investigate customer complaints. Most insurance companies fear state Departments of Insurance more than they do the courts. If they are indeed violating the terms of the contract or delaying the claim, the state Department of Insurance has the ability to fine them or even prevent them from selling policies in that state.

However, before he takes that drastic of a step and ends up feeling foolish,  he should read the actual policy very carefully. Find out exactly what his mother agreed to when she took the policy and have the insurance company explain exactly what part of the policy they are claiming when they deny a claim. If he does that, he will know if the problem is a misunderstanding on his part or the insurance company she choose 20 years ago is trying to screw her out of a claim.

 II.  Second, he should hire a professional, called a Continuing Care Coordinator.   They are trained in the paper-work that most LTCI require.  It is possible, that the insurance company cannot pay the claim until all the paper-work is completed correctly.

I have worked with hundreds of applications in my 26-year career.  What I have found is that when I allow clients to complete their own applications, they leave things blank or provide only partial answers to questions.  Unless I review their application before I submit it, and catch the absence of information, I have learned that an underwriter will not approve the application until I get the missing information from the applicant.  If I do not get the information within the time allowed by state law, the applicant has to start over again.

As an insurance agent, one of my jobs is to make certain that all the information from the application is complete.  One of the jobs of a Continuing Care Coordinator is to make certain that there are no delays with paper-work.

If you have a similar problem as this man and are concerned about money to hire a Continuing Care Coordinator, don’t get too upset until after you review the LTCI policy your loved one has.  Many plans will pay that charge in addition to the monthly benefit.  However, some will not.  You will need to review the actual policy to be certain.


The moral of this post is, “Don’t complain until you have all the facts.”

Obamacare was rushed through congress based on anecdotal information.  Congress was not given all the facts behind the sad stories that were told.  Now look at the fiasco America has called Obamacare.

Before you complain that the insurance company is trying to “screw” you, take time to be certain that you have done everything you are supposed to.  That includes,

  1. Make certain that all the triggering criteria are present and have been certified.
  2. You understand what type of plan exists
  3. You have completed everything the insurance company has asked for

If you have verified that you have done everything, and that the insurance company is actually in the wrong, go ahead and file a complaint with your state’s Department of Insurance.

Just make certain that you have a full understanding of what type of policy is involved and have done everything that is required.  Departments of Insurance can force an insurance company to fulfill their promise in a timely manner if they rule that the insurance company is at fault.

However, they can find that the insurance company has not done anything wrong.  If they do, they will try to help you understand your misunderstanding of how your policy works.

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