Class-Action Suit Fines Insurers for Concealing LTC Increases

BY L.A.S.

Three companies were fined for concealing planned rate increases on long-term care policies in the state of Missouri. The companies were: Mutual of Omaha, American Heritage Life, and Wakely & Associates (a third-party administrator).

Under the court settlement of the class-action suit, Mutual of Omaha will have to maintain benefits on current policies with a value of $8.5 million. American Heritage will have to provide benefits to lapsed policies valued at $2.5 million. Wakely has paid a $4 million fine.

Wakely had helped American Heritage with the design, marketing and sale of the long-term care policies.

Those affected included 1670 people in Missouri who bought long-term care insurance policies between 1995 and 2000.

Alphabetical List of Long-Term Care Insurance Carriers

Accurate as of January 2009. Most plans use as a trigger the inability to meet 2 of the 6 ADL's (activities of daily living which are bathing, continence, dressing, eating, toileting, and transferring), and many also accept Cognitive Impairment. No endorsement is implied or given by listing these insurance carriers. You must determine which plan is best for you.

Advanced Resources Marketing --
www.armltc.com 617-783-2622. Group and individual. Available in all states. Issue ages 18-85. Minimum group size 10. Trigger: TQ. Portable. Elimination periods zero to 100 days.

Aim Marketing & Ins. Services --
www.AimMarketing.com 600-245-2467. Available in all states. Issue ages 25-80. Minimum group size three. Portable. Elimination periods – all available.

AJF Consultants --
www.ajfconsultants.com 866-901-5323. Available in all states. Issue ages: any. Minimum group size: any. Portable. Elimination periods: none.

Allianz Life --
www.allianzlife.com 800-950-7372. Available in all states EXCEPT CA HI MA NY. Issue ages 18-84. Minimum group size 10. Trigger: Unable to meet 2 of 6 ADLs. Portable. Elimination periods – 7, 30, 60, 90, 180, 365.

American Financial --
www.afmus.com 800-880-3072. Available in all states. Issue ages 18-84. Minimum group size five. Trigger: Unable to meet 2 of 6 ADLs or cognitive. Portable. Elimination periods – zero to 365.

American Independent --
www.aimforltc.com 800-672-7202. Available in AK AZ AR CA CO HI ID KS LA ME MI MO MT NE NV NM NY OK OR TX UT VT WA WY. Issue ages 18-99. Minimum group size five. Portable. Elimination periods – many options. Many benefit triggers to choose from.

American Insurnet Agency --
www.AmericanInsurnet.com 800-333-4638. Available in all states. Issue ages 18-89. Minimum group size five. Trigger: Unable to meet 2 of 6 ADLs or cognitive. Portable. Elimination periods – zero day for home care; zero-30-90-180-354 for nursing home.

American Life & Health --
www.amlifegroup.com 800-992-1492. Available in all states EXCEPT CA CT KS ME MA NH NJ NY PA RI VT AND WA. Issue ages 18-84. Minimum group size: case by case. Trigger: Unable to meet 2 of 6 ADLs. Portable. Elimination periods – 90 days only.

Assurity Life Insurance Co. --
www.assurity.com 888-276-7619, x 3774. Available in all states EXCEPT FL NY AND VT. Issue ages 40-84. Minimum group size, none, but discount with 10 members. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 0, 30, 90, 180.

Berkshire Life Insurance --
www.TheBerkshire.com 888-505-8743. Available in all states. Issue ages 40-84. Minimum group size, none, but discount with 10 members. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 0, 30, 90, 180.

Equitable Life & Casualty --
www.Equilife.com 800-352-5121. Available in all states EXCEPT AK CA CT DE DC FL GA HI ME MD MA MN NH NJ NY PA RI VT WA WI. Issue ages 18-84. Minimum group size, none. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment (requires physician statement). Portable. Elimination periods – 0, 30, 60, 90, 120, 180, 365.

GamePlan Financial --
www.gameplanfinancial.com 770-517-2765. Available in all states. Issue ages 18-84. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 0, to 365.

Gelbwaks Insurance --
www.gelbwaks.cm 954-236-9999 x104. Available in all states. Issue ages 18-70. Minimum group size three. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 20 to 180 days.

Golden Benefits --
goldenbenefits.com 415-454-3359. Available in California. Issue ages 18-79. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs. Portable. Elimination periods – 0, 30, 60, 90.

Great American Life --
www.aimsltc.com 800-325-9876. Available in all states EXCEPT CA CT HI NJ NY. Issue ages 18-89. Minimum group size, five. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 30, 60, 100, 180, 365.

Guaranty Income Life --
www.gilico.com 800-535-8110 x292. Available in AL AZ AR CA CO FL GA IL IN IA KY LA MI MS MO MT NE NV NM NC ND OH OK OR SC TN TX UT WY. Issue ages to age 85. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment (requires physician statement). Portable. Elimination periods – 90.

Harbor Insurance --
www.HarborIns.com 866-424-2167. Available in all states EXCEPT NY. Issue ages varies by carrier. Minimum group size, any. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – varies by carrier.

Insurance Network America --
www.InsuranceNetwork.com 800-456-7999. Available in all states EXCEPT CA HI MA NY. Issue ages 18-84. Minimum group size, one. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 7, 30, 60, 90, 180, 365.

John Hancock --
www.JohnHancockLTC.com 800-330-4598, 800-330-4582. CareChoice plan available in AL AK AZ AR CT DC GA IL IN IA KS KY ME MA MS MO NV NH NM NY OH OK OR RI SC SD WV WI and WY. Corporate Choice plan available in all states EXCEPT CA FL TX WA. Corporate Solutions plan available in all states EXCEPT CA NY. Issue ages 18 to retirement. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 30, 60, 90.

LifeSecure Insurance Co. --
www.YourLifeSecure.com 810-220-4613. Available in AL AZ AR CO DE DC FL GA HI ID IL IN IA KS KY LA MD MI MN MS MO MT NE NV NM ND OH OK OR SC SD TN TX UT VA WV WI WY. Issue ages 18-84. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 90.

LTCi Decision Systems --
www.LTCia.com 800-360-9853 or 720-922-9060. No details were furnished to reporting group.

MedAmerica Insurance Co. --
www.medamericaltc.com 800-544-0327. Available in all states. Issue ages 18-85. Minimum group size ten. Trigger: Unable to meet 2 of 6 ADLs. Portable. Elimination periods – 30, 60, 90, 180 days.

Metropolitan Life Insurance --
www.metlife.com 888-776-3882. Available in all states. Issue ages 18-84. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 20, 45, 100 days.

Nationwide Financial --
www.nationwide.com 800-321-6064. Available in all states EXCEPT MN MT WA. Issue ages 21-80. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 90 days.

Pacific Advisors --
www.PacificAdvisors.com 877-455-9580. Available in all states. Issue ages 18-84. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 30 to 180.

Rampart America --
www.RampartAmerica.com 800-221-4623. Available in all states. Issue ages 18-85. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs. Portable. Elimination periods – 30, 60, 90.

Roster Financial --
www.RosterFinancial.com 800-933-6632. Available in all states. Issue ages 18-85. Minimum group size, five. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 30, 60, 90, 180 days.

Senior Market Sales --
www.SeniorMarketSales.com 800-786-5566 x4. Available in all states. Issue ages 18-84. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – zero to 730, depending on carrier.

The Prudential --
www.Prudential.com 800-732-0416. Available in all states. Issue ages 18-79. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 30, 60, 90, 120, 180 out of 365 days.

Transamerica --
www.TransamericaLTC.com 817-285-3604. Available in all states EXCEPT GA ID MT PA VT. Issue ages 18-79. Minimum group size, five. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – zero, 30, 60, 90, or 180.

Trustmark --
www.TrustmarkSolutions.com 800-840-4692. Available in all states. Issue ages 18-80. Minimum group size, 100. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 90 days.

Underwriters Marketing Service --
www.Callums.com 800-524-1774. Available in all states. Issue ages 18-84. Minimum group size, three. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – varies.

Unum --
Unum.com 800-421-0344. Two plans, GLTC Advantage and Group LTC. Available in all states. Issue ages 18-80. Minimum group size, ten or 15 depending on which plan is selected. Trigger: Unable to meet 2 of 6 ADLs or cognitive impairment. Portable. Elimination periods – 20 to 730 days.

Wachovia Insurance Services --
www.Wachovia.com 803-765-3520. Available in all states. Issue ages 18-75. Minimum group size, ten. Trigger: Unable to meet 2 of 6 ADLs. Portable. Elimination periods – most have 90-100 days.

Zenith Marketing Group --
www.ZenithMarketing.com 800-733-0054. Available in all states. Issue ages 18-79. Minimum group size, four. Trigger: Unable to meet 2 of 6 ADLs or severe cognitive impairment. Portable. Elimination periods – 30, 90, 180, 365.

Two Kinds of Long-Term Care Policies? Yes, Cash Model and Indemnity

While most people know that there are two basic forms of life insurance (term and whole life), they do not realize that long-term care insurance also has two basic forms, ie cash model and indemnity model.

It is hard enough to sort through the variables of setting up a long-term care plan. You have to select a coverage period, how much a month you think you might need for a nursing home, whether to include home health, whether to include an inflation protection rider.

First, the Cash Model: Once the policy-holder qualifies to become claim eligible, the insurer will mail out a check each month for the full amount of the monthly benefit. This money is his or hers to spend as they see fit to cover their bills. The cash model does not require the use of licensed care for the insured to be covered. The insured has complete freedom of choice of providers to tend to their needs. He can even buy a lift-equipped van if that what is needed to maintain independence.

These cash payments are tax-free up to $98,550 in 2008. It is an ideal plan for the insured, because he will know exactly how much money is coming in each month, and gives such complete freedom of choice in how one can spend it. Any excess funds can be stashed away in savings or investments for such time as the LTC policy coverage period expires. And if the insured does pass away, those funds will be in their accounts to cover any debts and be passed along to their estate's beneficiaries.

The second type is the Indemnity Model, which is what most of us have been exposed to. This model requires that in order for benefits to be paid, they must be performed by a licensed caregiver AND for eligible expenses. The insured typically has to receive at least one hour of licensed care per day to remain covered by the policy.

The insured under this plan has a daily amount allotted to him; at the end of the month, the insurer totals up the days in which the insured received at least one hour of care, multiplies by the daily coverage amount, and then issues the check to the insured.

Now think about this. This means that the insured could potentially receive wild variations in the level of benefits under this format. True, they are tied to actual services received. But the insured may have a real need for some type of adaptive equipment in the home so that they can remain in their own homes. This equipment is normally going to have a monthly bill no matter whether the insured has a lot of home visits or not – and MAY NOT be covered under your policy. That means the insured is paying out of his own pocket for whatever is needed to maintain independence.

The indemnity policy is generally 40-60 percent less expensive than the cash model, and I hope you readers can see why. People are scared of the cost of a LTC plan as it is, so insurers just show this model to their prospective clients. Your agent may not even be trained in the cash model plan because so few people know enough to ask for it.

You are wiser to save money by cutting down the coverage period rather than by going to the indemnity plan. Industry studies show that most long-term care plans have a claim history of only 2 to 3 years. And yet many clients select the lifetime option because they are terrified of outliving their money. This is one case where fear is costing people thousands of dollars in premiums unnecessarily.

I should also add that in case you do not qualify for coverage under a long term plan (in other words, you are rejected by their underwriting department), you still have other options. Many life insurance policies now have an accelerated benefits provision, where you can draw upon the value of your life insurance plan to pay your nursing home or other end-of-life expenses.

I hope this information is of benefit to you in planning your insurance coverages.

[Disclaimer: This article is not intended to sell the reader anything. But you must still consult with a financial planner (preferably certified) or your local insurance representatives to find a policy that fits your needs.]