Wrongful Denial of Benefits for Long-Term Care
Though many policyholders forget, it’s important to recognize that insurers are always looking to maximize their profits — and this typically involves a strategy of minimizing their expenses by developing policies that justify the denial of seemingly legitimate claims. The easier it is to justify the denial of an insurance claim, the less likely it is that the policyholder will challenge the decision. This enables the insurer to avoid having to payout for claims that are actually recoverable.
Long-term care insurance policies are no exception to this rule. In fact, long-term care can be quite expensive for an insurer to cover, and as such, denials are common. Policyholders who have purchased insurance coverage for their long-term care (i.e., benefits that cover nursing home costs, costs of assisted living, etc.) may find that the policy is written in an ambiguous manner or that the insurer uses “slippery” tactics to avoid having to payout.
Let’s explore some basic issues.
Ambiguous Provisions Must Be Interpreted to Favor Coverage
Insurers in the long-term care context often write ambiguous contract terms and provisions that are then used to justify the denial of benefits. Fortunately, Illinois law is protective of the policyholder in this regard — if an insurance contract provision is legitimately ambiguous, then the courts must interpret it in a manner that favors coverage.
For example, if it is not clear whether your long-term care policy covers the expenses accrued by staying at nursing home facilities, or only home care, then the court will construe the ambiguous provision to be more expansive (covering nursing home facilities).
Facility-Based Care vs. Home Care
Among the many points of conflict in long-term care policies is whether the coverage extends to facilities (i.e., nursing homes) or whether it only applies to expenses accrued for long-term home care, such as assisted living services provided by an on-call caregiver who visits one’s residence throughout the day/week.
Medical Necessity vs. Activities of Daily Living
Generally speaking, long-term care policies activate when the policyholder is unable to engage in their “activities of daily living,” however that is defined in their contract. What activities constitute “activities of daily living” is a potential coverage issue in and of itself. Some policies are much more restrictive, however, and only activate when long-term care is medically necessary for the policyholder (for example, in a situation where the policyholder needs to be put on a respirator and provided care due to paralysis).
Contact an Experienced Chicago Insurance Attorney for Help With Your Claims
Here at the Bryant Legal Group, P.C., our team of attorneys has decades of experience representing the interests of policyholders involved in a wide range of disputes with their insurers, including conflicts that center around the wrongful denial of a long-term care insurance claim.
Long-term care claims can be quite complex, given the vulnerability of the policyholder (who may lack the physical, emotional, and financial wherewithal to push a comprehensive challenge). As such, it’s important that policyholders seek out the assistance of attorneys who have a consistent track record of success in handling such disputes, and are capable of doing so in a manner that is respectful of the policyholder’s specific goals and limitations.