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Why insurers deny long-term care benefits - II

Your source for the latest health, disability and insurance news and tips.

Care costs for the elderly are steadily increasing. Long-term care expenses not only includes medical outlays, but also the cost of living. While Medicare can be relied upon for some healthcare payments, there is no such guarantee in getting imbursements to cover living expenses.

Incorporating long-term care insurance into retirement planning is a wise decision. Coverage can help cover the steep price of nursing homes, assisted living facilities and home aides.

As we discussed in our previous post, these exorbitant costs have hit insurers square in the pocketbook. In fact, the numbers are so great that many insurance companies will try to deny valid claims.

We'll continue our discussion of how this claim denials can happen in today's post.

Personal care

Insurers often include language in long-term care policies excluding coverage for "personal care." This allowance includes everything from errands run by a caregiver to light housework. Similar coverage restrictions can be found for family-provided care.

Experts advise policyholders not to give up when coverage is denied on either ground. As for personal care, payments can often be secured if "activities of daily living" requirements are satisfied. In other words, the insured demonstrates that they are unable to eat, dress, bathe, etc. without assistance.

As for coverage denials based on family-provided care, experts advise reading the fine print. While care provided by spouses or children might be excluded, the policy might not mention grandchildren.

Cognitive impairment

The failure to pay premiums will result in an automatic denial of benefits, but what happens when the policyholder is suffering from a cognitive impairment that prevents such knowledge?

Most states grant policyholders grace periods lasting several months before policies lapse due to nonpayment. Alternatively, many insurers reinstate policies if presented with a physician's statement attesting to the policyholder's cognitive impairment.

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

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