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Insurance company denies 96-year-old widow's claim

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Many laypeople aren't aware of many of the clauses and requirements in their long-term-care insurance policies. Insurance companies, however, know them all too well and will invoke them. The cost to policyholders can be huge and potentially financially ruinous.

One such case involves a 96-year-old Nebraska widow and the long-term care insurance policy she and her husband purchased over 25 years ago. The insurance company, Minnesota-based Thrivent Financial, says it will not pay the $40-a-day benefit she was expecting for her assisted-living facility, because she did not have a three-day hospital stay within 90 days of entering the facility.

In the early 1990s, the insurance company sent out letters offering to upgrade the policy. It would have eliminated the hospitalization requirement. However, the woman and her husband declined the offer. The company says it no longer sells policies with this requirement.

The woman's grandchildren are fighting to get the benefits they believe she deserves, but their appeal to the insurance company was denied. One notes that his grandmother actually saved the insurance company money. After she spent time in the hospital for kidney failure in 2013, she went back home instead of immediately going to an assisted-living facility. She stayed at home until she could no longer get along on her own. However, that was more than 90 days after her hospitalization.

"She's not trying to get around what the spirit of the policy is," says her grandson. However, it's not the spirit that Thrivent is citing in denying her claims. Thrivent's appeals panel described the woman's efforts to remain in her home as long as possible as "commendable," but noted, "these actions cannot supersede the contract requirements."

As an official with the American Association for Long-Term Care Insurance notes, "People don't understand when buying that the policy language governs everything." She cautions people not to "let the small print become the big print when care is needed."

Cases like these show why it is a good idea to have an attorney experienced with long-term-care insurance policies review the policy before you buy it and advise you before decide on accepting or declining any changes. If you have not done this, at least have an attorney review the policy before you or a family member moves into an assisted living facility or nursing home to help ensure that you are meeting their requirements.

Source: Star Tribune, "Insurance policy's fine print trumps 96-year-old's good faith" James Eli Shiffer, Dec. 20, 2014

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