From the September 2008 issue of Investment Advisor • Subscribe!

September 1, 2008

The Half-Empty Glass

In July 2007, IA spoke with financial advisor Holly Brown Carroccio and her mother, Diane Billingslea, an insurance agent, regarding Marie Billingslea, Diane's mother and Holly's grandmother. Diane had sold Marie a policy for LTC some eleven years before, and at the time we spoke, Diane and Holly were fighting the insurance company, Life Investors Insurance, to get Marie's assisted living care paid for. Life Investors had denied the claim, saying Marie had passed the cognitive assessment and was fully capable of caring for herself, despite numerous statements from doctors that she suffered from severe dementia and chronic mental deterioration.

Now, over a year later, we once again spoke with Holly regarding Marie's case. Diane filed an appeal after our article ran last year, and Marie was to be reevaluated. "We went to see a doctor, and got a letter from the doctor stating what [Marie's] condition was," Holly recalls. The doctor said she could not live on her own and needed care due to cognitive impairment. But when Life Investors reevaluated her, they once again focused on the "logical--20 or 25 questions," says Holly, such as what day it is and who the President is. "She could pass that," Holly relates, and, emphasizing that that particular test was "the only thing [Life Investors] would focus on," despite no restrictive language in the policy, she says they once again denied benefits. "They said it doesn't matter that the doctor said she can't live on her own. 'We understand that you're concerned about her safety, but she doesn't qualify for benefits. The neurological test that was administered says she doesn't have severe cognitive impairment.'"

Still in assisted living, Marie is completely unable to care for herself. Says Holly of her grandmother, "She's continued to worsen. Her short-term memory is terrible, and she can't remember having a conversation five minutes ago; she can't remember when she ate." Marie will spend the day at Holly's house, she says, and then anywhere from fifteen minutes to an hour later will assure Diane that "she hasn't seen anybody in weeks. The thought that she could live by herself and not need care is ridiculous."

Marie was recently retested and is now deemed eligible for care, although Holly points out that does not mean the previous care she's received will be paid for. Currently the case is with an attorney, who, Holly says, feels very strongly that things will be decided in Marie's favor. The next step, she says, is a demand letter from the attorney. If that fails to elicit payment, they will file suit.

One reason Holly consented to be interviewed for this article is her concern that others may end up in the same situation as her grandmother, particularly since Holly, as a financial advisor, recommends to her clients that they cover themselves against the risk of needing long-term care. "It's hard enough to face these risks," she says, without having to worry that the client's coverage won't be there when it's needed. She's very careful about the coverage she recommends, she says, and advocates companies "with a lot of diversity on their books in terms of products, so their risk is spread around." Of her grandmother's situation, she says sadly, "We tried to let it work its way through the system without going to [court], but it isn't working. We're not litigious people, and to me that's a last resort."

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