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Why insurers deny long-term care benefits

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Planning for retirement requires more than sound investment strategies. Retirement accounts must be augmented by Medicare, life insurance, and long-term care insurance.

The latter item can sometimes present difficulties due to the rising cost of nursing homes, assisted living facilities, and in-home care. Expenses incurred by long term care requirements have made many insurers reluctant to fulfill their obligations to policyholders.

Insurance companies can attempt to deny payment on grounds that may be specious at best.

Ineligible care provider

The language of many policies dictates that care services must be provided by an "eligible care provider."

The policy may not set forth general requirements for facilities to meet. Rather, it might require companies to have very specific licensure, or satisfy other exacting care requirements.

Experts urge policyholders to be diligent and research whether a long term care facility meets the policy's definition of an eligible care provider.

Another strategy employed by insurers to avoid payment is to claim that a facility doesn't "meet current criteria." The argument doesn't hold water if the "current criteria" is not outlined in the policy.

No prior hospitalization

"The gatekeeper provision" verbiage states that coverage will be denied unless the policyholder was previously confined to a hospital and/or nursing home.The provision is now prohibited in most states.

To be continued in our next blog post...

Source: Forbes, "How long-term care insurers deny benefits," Richard Eisenberg, March 21, 2014

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