When people invest in long-term care (LTC) insurance, they expect it to provide financial relief during some of life’s most challenging moments – when aging, illness, or disability make everyday living difficult. But many are shocked to discover their long-term care claims are denied.
If you’ve experienced denied long-term care insurance claims, it’s essential to understand the common reasons behind denials, what rights policyholders have, and how the appeals process works.
Statistics of Denied Long-Term Care Insurance Claims
Data from the 2022 Milliman Long-Term Care Insurance Survey reveals a stark reality: many long-term care insurance applications are denied from the outset.
- Ages 40–49: 12.4% claims are denied
- Ages 50–59: 20.4% claims are denied
- Ages 60–64: 30.4% claims are denied
- Ages 65–69: 38.2% claims are denied
- Ages 70-74: 47.2% claims are denied
These figures demonstrate how age can significantly impact approval rates, often due to underlying health conditions or risk factors flagged during underwriting. But even after a long-term care insurance policy is issued, claims may still be denied later, long after premiums have been paid.
Why Long-Term Care Insurance Claims Get Denied
Long-term care can be expensive, yet related costs continue to rise in the United States – alongside the never-ending denial of some (if not most) long-term insurance claims.
Here are some of the reasons why long-term care insurance claims are denied:
Insufficient Documentation
Many denials stem from incomplete, inconsistent, or unclear medical records. For instance, daily caregiver notes, treatment records, or care plans may be missing or fail to match the insurer’s criteria. Insurance companies may claim they never received the required forms or dispute the care provider’s qualifications.
Disputes Over Medical Necessity/Functional Impairment
Long-term care policies typically require the insured to be unable to perform at least two Activities of Daily Living (ADLs), such as bathing, dressing, or toileting, or to suffer from cognitive impairment. If the insurance company disagrees with the doctor’s certification or claims there is insufficient evidence of impairment, they may deny the claim.
Some insurers require documentation from specific healthcare providers or certified assessors. If the policyholder submits evaluations that don’t meet the insurance company’s strict standards, the claim may be rejected.
Failure to Meet “Benefit Triggers.”
To qualify for benefits, policyholders must meet the policy’s “benefit trigger” – a medical condition or functional limitation that initiates eligibility. These triggers are often tied to ADLs or cognitive decline. However, insurers may argue that the condition does not yet meet the threshold for coverage, especially if the need for assistance is occasional or intermittent.
Waiting Period Not Met
Most long-term care policies have a waiting period, also known as an elimination period, ranging from 30 to 90 days. Some policies only count the days on which paid care is received (service days), rather than calendar days. If the policyholder has unpaid caregivers or intermittent care, the waiting period may be extended, delaying benefits or leading to outright denial.
Pre-Existing Conditions
Insurers can deny claims by arguing that the condition requiring care was pre-existing and thus excluded. While California policies must clearly disclose exclusionary periods, these clauses are still used to contest benefits, especially for degenerative conditions that may have been undiagnosed at the time of application.
Lack of Coverage at Time of Claim
Coverage lapses due to missed payments or misunderstood policy expiration terms can also result in a denied long-term care insurance claim. Some insurers send minimal notice before terminating a policy, especially for elderly policyholders with memory issues.
Non-Covered Services or Settings
Some policies cover only institutional care (such as skilled nursing facilities), while others are limited to home-based services. A denial may occur if the care was received in an unlicensed facility or from an unapproved provider, even if the policyholder was otherwise eligible. Some long-term care policies may also impose outdated benefit limits, such as lower caps for assisted living or the exclusion of adult day care programs altogether.
How to Appeal After a Long-Term Care Insurance Denial
If your long-term insurance claim was denied, you are not without options. California law offers policyholders a pathway to appeal and contest a denial.
Request a Written Explanation
Under the California Insurance Code, insurers must provide a written explanation for any denial. This includes the specific reasons for the refusal and any policy language supporting it. Review this carefully to understand the basis of the dispute.
Review the Policy in Detail
Examine your policy for key provisions, including:
- Definitions of disability and benefit triggers
- Covered services and providers
- Elimination period and benefit caps
- Requirements for medical certifications
Gather Comprehensive Documentation
To counter the denial, collect:
- Updated medical records and physician statements
- Functional assessments that show ADL limitations
- Caregiver logs or notes
- Provider licenses and invoices
- Evidence of timely premium payments
Submit a Formal Appeal
Most insurers allow internal appeals. This usually involves submitting a written appeal with supporting documentation by a specific deadline. If the appeal is denied again, you may file a complaint or pursue legal action.
Consistency and specificity are crucial when appealing a denied insurance claim. A long-term care insurance lawyer can help ensure your appeal meets the insurer’s evidence standards.
Entrust a Denied Long-Term Care Insurance Claim to a Lawyer
Appealing an LTC insurance denial is time-sensitive and can be legally technical. Insurers may rely on internal guidelines, contracted third-party reviewers, and complex policy language to maintain their position.
Many claimants give up after a single denial, but the reality is that many appeals succeed with proper legal guidance.
A long-term care insurance claim lawyer can:
- Analyze the policy’s legal terms
- Challenge improper interpretations or bad-faith conduct
- Coordinate with physicians and care providers to develop stronger records
- Represent you in appeals, negotiations, or litigation
At The Law Offices of Kevin M. Zietz, we have proven experience in helping our clients with long-term care and disability insurance disputes in California. Call us today to schedule a free consultation and get started on your appeal.
