The New York Times recently ran an article by Ann Carrns about long-term care insurance (LTCI) claims.
The reporter quoted comments by Jesse Slome, the executive director of the American Association for Long-Term Care Insurance, Westlake Village, Calif., about the fact that for now, at least, the typical LTCI claimant is a woman.
Nothing in the article would be too surprising to anyone who hangs out at LifeHealthPro.com, but I thought the reader comments posted below the article were really interesting.
One reader talked about how much help having private LTCI had been for her in-laws. She said her father paid premiums for 5 years, then died without using the policy, but that her mother paid for 8 years and ended up using $372,000 in benefits to pay for 5 years of nursing home care.
Another poster cited the story of a mother who had bought LTCI coverage, filed a claim, and discovered that restrictions whittled the value of the benefits to next to nothing.
Other posters talked about the difficulty that people who already have health problems face when applying for LTCI.
I think the comments showed that many consumers are interested LTCI and the need for coverage but deeply concerned about how stable the issuers will be and whether the policies will work the way the holders expect when it comes time to file claims.
If insurers really want to send the LTCI lapse rates through the roof (and lose the goodwill that helps them sell other products), maybe they could make a point of causing aggravation for policyholders who seem likely to post comments about tales of LTCI claims woe on Internet message boards.
If insurers really want to maintain goodwill among LTCI policyholders, whatever the future holds for LTCI, maybe it would be a good idea to make sure policyholders know how the policies really work and discuss policy provisions, fraud checks and other matters that could lead to a gap between how a claimant might want a policy to pay off and how the policy really will pay off.
The policyholders may not read the disclaimers, let alone understand what they are reading, but, if insurers can show that they made a serious effort to warn policyholders of how the world works ahead of time, maybe the policyholders, future prospects and regulators will be a little more understanding of what happens when it turns out that LTCI policies aren’t magic genies that can grant all LTCI finance wishes.