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Will your LTC clients get their claims paid?

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Several major long term care insurers are in the media spotlight for allegedly denying legitimate long term care claims. According to a highly publicized March 26 article in the New York Times, thousands of seniors have filed complaints or brought suit against LTC insurers for making it difficult, if not impossible, for them to receive benefits.

The article also pointed out a wide disparity in complaint ratios between the largest LTC carrier and those whose claims practices have come under fire.

In the story’s aftermath, presidential candidates Sen. Barack Obama (D-Ill.) and Sen. Hillary Rodham Clinton (D-N.Y.), have called for an investigation into the industry’s LTC claims practices. In addition, leaders of the House Energy and Commerce Committee have asked two LTC carriers for documents relating to their LTC claims practices.

Regardless of one’s view of the Times story, it makes sense to do business only with LTC carriers who process claims responsibly. Here are steps you can take to protect your clients:

  1. Revisit your LTC carriers’ financial ratings. Deal only with top-rated companies.
  2. Watch for carriers with the lowest premiums or highest commissions who may be buying
    unprofitable business.
  3. Be on the alert for post-claims underwriting. If a carrier neglects traditional underwriting reviews, watch out. It may be just trying to get the premium on the books and then deny claims later.
  4. Check out carrier complaint ratios with the National Association of Insurance Commissioners (NAIC).
  5. Pay attention to client and advisor feedback on which carriers handle claims most efficiently.

What “red flags” are affecting your business? Send your comments to the National Ethics Bureau at [email protected].


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