What is the Actual Claims Practice?

Each day visitors to this website request information about long-term care insurance. Some of our visitors already own long-term care insurance and they have a question about their current policy. Other visitors inquire about how to purchase a policy for themselves. We’ll often ask them “What has peeked your interest in long-term care insurance at this time?” Frequently, their response will be something like this:


“Well, my dad has a long-term care policy and it’s paying for his assisted living facility right now. I want a policy that will do the same for me.”


“My mom has 24-hour home health aides right now. If it wasn’t for her long-term care policy, we’d have to put her in a nursing home.”


“I was the power of attorney for my aunt and her long-term care policy paid most of the cost of her care each month for nearly ten years.”

Millions of long-term care policies were purchased in the 90′s. Hundreds of thousands of policyholders are now making claims. In fact, in just 2013, the leading long-term care insurers combined to pay over $7.5 BILLION in long-term care insurance benefits to over 273,000 policyholders. (Source: AALTCi)

More than $20 million dollars in benefits is being paid to long-term care policyholders every day, 7 days per week. In the time it takes to read this post, over $70,000 of long-term care insurance benefits are being paid.

But how many claims are denied?

The federal government commissioned an audit of long-term care insurance claims practices and the Department of Health and Human Services published the findings in a 20-page report. The audit was conducted over a 22-month period in 2008 and 2009.

The audit reviewed both approved and denied claims from seven of the leading long-term care insurers. These seven insurance companies are currently paying over 70% of long-term care insurance claims. They audited EVERY denied claim for some of the insurers in the study.

Here are a few important points made in the report:

“…there is a low incidence of disagreement between the clinical audit team and the insurance company adjudicators, particularly when it comes to denied claims.”

“…There is a greater probability of approving rather than denying a questionable claim.”

“…Regarding denial decisions, we found that in all cases, there was no evidence to suggest that the individual met the tax-qualified criteria for benefit eligibility in their policy.”

“…This would suggest that companies are consistently applying their clinical contract language to their claims decisions.”

In other words, the claims are being paid!

The reason some claims are not paid is because the policyholder does not meet the federal guidelines for “benefit eligibility” in the policy.

Click the image on the right to read the full report.