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My wife purchased a long-term care policy many years ago, but within a few years the insurance company raised her rates so high that she could no longer afford it. By then she'd contributed several thousand dollars.


We're trying to determine whether the insurance provider will/must return any of the money she put into the account, and whether that activity (raising the rates to a point the purchaser can no longer afford the policy) constitutes grounds for a complaint. Unfortunately, we think it's a lost cause, and that the company simply walks with her money. While we think it's also disingenuous, we realize she may probably signed an agreement of some sort allowing this. Thoughts/Answers?

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Dianeb1953 - yes, it took 11 months for payments to begin. I plan to appeal the arbitrary start date, think I can "prove" my Mom's ADL problems as of October 2017. Both her doctor and the assisted living facility have records to support my claim. I'm just feeling a little worn down by them at the moment!
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Unless there was misrepresentation or fraud that induced your wife to buy the Long Term Care Insurance Policy, or a breach of the terms of the insurance contract, the courts wouldn't be able to help her get her money back.

Was the hefty increase in premiums an indicator of misrepresentation? Were the increases a breach of what she contracted for? You could get answers to those questions by asking an insurance lawyer in your state to read the LTC Policy and check on the laws in your state.

As others have posted here, you have to get up pretty early in the morning to beat an insurance company in court.

If you ever decide to check on LTC insurance in the future, remember that you do get a free look period that allows you to change your mind even after you sign the contract. From the Shopper’s Guide to Long-Term Care Insurance, published by the National Association of Insurance Commissioners:
If you decide you don’t want the policy soon after you bought it, you can cancel it and get your money back. You only have a certain number of days after you get the policy to tell the company you don’t want it. How many days you have depends on the “free-look” period. In some states the insurance company must tell you about the free-look period on the cover page of the policy. In most states you have 30 days to cancel, but in some you have less time. Check with your state insurance department.
https://www.ltcfeds.com/epAssets/documents/NAIC_Shoppers_Guide.pdf

Check the policy to see if there is a clause for Premium Refund at Death:
This benefit pays to your estate any premiums you paid minus any benefits the company paid. To get the refund, you must have paid premiums for a certain number of years. Also, some companies refund premiums only if the policyholder dies before a certain age, usually 65 or 75.

Posters here have pointed out how a Hybrid LTC policy combines Life Insurance with the coverage for risk of long term care, so survivors can get a death benefit if the policy isn't used up on care costs.

In my state, Massachusetts, LTC insurance policies have a unique exemption that protects the home from Medicaid estate recovery. LTC policies are different in every state.
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GraceLPC Oct 23, 2018
I have a related question. Does Medicaid only Claw Back for bill/services at NH? During past 5 years of life? Or some other restrictions?
I have been looking into Life Insurance & LTC. My current plan is that the lump sum, non- vested pension pays double at my death, thus giving my sons money for my burial....but would that be subject to Clawback?
Since the current balance with interest is $2025, and I can not to a partial withdrawal, I had to find an employer, who let's me work as an independent contractor, to meet Medicaid for Employed Person with Disability guidelines.

I don't want to save money, budget TP & stretch 1/2 tank of gas for a month, only to have it taken by Medicaid. I don't want to pay Insurance premiums to go to Medicaid, even if I avoid NH. I just started getting Waiver Services.

Your feedback would be appreciated. I currently live I Iowa. Waiting for Housing Vouchers. It took over 2 years for wait list to open. 80% of income goes to rent.
:-(

Trying to not be a burden. Only 61.
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You should always read a contract before signing it. In this case, see an attorney.
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I don't think there is any refund policies at such stage of insurance.
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If there is no cash value for the policy (some LTC policies have an investment component - sound like this one doesn't), then this is just how insurance works. You pay for the policy for as long as you want to be covered.
If, at any time while she was paying for the premiums, your wife required long term care, the coverage would have kicked in for her.
If you pay the premium on your car insurance and you don't crash the car, the insurance company doesn't give you back the premium.
Many LTC policies have had to have big rate increases in recent years. Many companies have gotten out of the LTC business. People are living longer and the insurance isn't a very good business for them. There are a lot of hybrid products on the market now. You may want to talk to your agent about them.

ps- A few thousand dollars in LTC premiums isn't much at all. It's very expensive insurance because what it covers is very expensive. The coverage varies, but if your wife had a health issue that allowed her to make a claim, the insurance company could have been on the hook for $3000 or so a MONTH, for a period of years or, in some cases, for life.
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On our LTC we had for life & premiums were getting too high so changed it to 6 yrs. So premium were affordable. Husband w alz now has 4 yrs left & I haven't needed mine (yet). I'm almost sure nothing comes back if not used. Just comfort that we have it. Bought in 98. Will check tho cause never expected it would.
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Expecting a refund isn’t correct for this line of insurance – it’s not like a life policy that has residual value. Having LTC insurance and “being covered” is the “value” of having insurance.

Say you had home insurance for 40 years without making a claim and thinking “what a rip off, I should have gotten something for all those premium payments” but in fact you did get something – you were able to sleep nights knowing you had coverage if your house burnt down. You got what you purchased … piece of mind during the coverage period.
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Countrymouse Oct 21, 2018
What you say is entirely true.

The wriggle room that seems to have been found in suits related to PPI and, I now see, in some class actions related to ltc insurance too seems to focus on the methods of selling but also the appropriateness of the cover to the people to whom it was sold.

The moral of the story should be, and always used to be, read the contract and understand what you're getting for your money before you hand it over. But the courts seem to be leaning ever more towards protecting consumers from wily financial services providers. Where will it end?!
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The insurance department of your state government can answer any questions about what the company is allowed to do. You can file a complaint with them.
Twenty years after my husband died ( he died young), I got any unexpected notice from the LTC insurance that he was owned money back and interest. I mention this to show that money back is a possibility.
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My Mom's Genworth policy (1999) provides a "limited benefit option". They mention this in the annual premium notification, and give more info if you call them. Basically, you'll receive benefits -- if you ever qualify -- for up to the amount you've paid in over the years. They also offer a keep-payment-the-same with reduced benefits option. Read your policy and any correspondence about premium payments carefully! And notify the company in writing if you elect any such option (suggest certified mail with return receipt, too).
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Dianeb1953 Oct 21, 2018
Has your mom ever needed to make a claim? If so, was it timely, easy, good customer service, or not?
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Generally LTC policies are meant to have the premiums increase with age since the chance that they will need to be used increases as we age. They are kind of like a term life insurance policy in that you pay for them as long as you might need them. If you cancel a term policy the premiums aren't returned to you, they were to cover for that period of time. Same with a LTC policy. Even the IRS recognizes that the premiums for these policies go up as we age in that they allow for a higher deduction of the premiums by age.
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Dianeb1953 Oct 21, 2018
This is not the case in California. It is illegal for LTC premiums to increase due to age or any other individual cicumstances. They can only increase when the entire group of policies of the same type are allowed to increase after approval by the Department of Insurance. Check your own state for what applies to you.
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Had another thought, went to Google, and sure enough...

Is there any suggestion that your wife was mis-sold this policy? Who was the insurer? Who sold the policy to her? What were the circumstances? What did she understand about the policy and its premiums at the time? How old was she? Was she given an opportunity to take advice before she signed the agreement?

I'm beginning to suspect that if you *can't* get the money back you're just slacking.

She may also genuinely have been weaselled into it by an utter slime-ball. In which case, good luck to you :)
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In these strange and disturbing times, when all sorts of consumer groups seem to be driving a coach and horses through the principles of civil and contract law, it may be that you can get someone to take an interest in getting some or all of your wife's money back.

You might even do better than that. Recently, here in the UK, I was flabbergasted by a case where a woman who had freely entered into a credit agreement and then been unable to fulfil her obligations was not only relieved of her remaining debt but refunded those repayments she had made and was still apparently after compensation for the distress she had suffered. It takes quite a lot to make me feel sorry for an evil blood-sucking moneylender, but honestly - !

So. Stranger things have happened.

You will want to line up:

The LTC policy details - number, dates, premiums paid.
The terms explaining how premiums were to be varied. There will have been some, and your wife will have agreed to them. But if they are deeply buried and/or obscurely worded, it'll help. So find them.
Your request for a refund of the premiums paid. Are you asking for part, or all? What would you be content with?

If you are going to argue for your wife to be restored to the status quo ante, as though she had never entered into this benighted contract, you might actually do better to ask for all of it. And think about adding annual interest to compensate for what the money would hypothetically have earned had it not been swallowed up in a useless policy - it'll give you something to concede in negotiations.

I have to say, I can't approve. Your wife, a consenting adult, signed a contract - more than that, bearing in mind that it is true of *all* insurance that it is in fact a bet, she made a bet with her insurer, pulled out, and lost her stake. I personally feel that she ought to take this on the chin; and if you take a straightforward "caveat emptor" view of contract law, then that's the law.

But, again, stranger things are indeed happening. It might be worth a go.
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Dianeb1953 Oct 22, 2018
Why do you have such a problem with consumer's rights? Most contracts are written by professional attorneys with plenty of ways for corporations to avoid responsibility. Consumers need protection too.
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It is getting harder and harder to even purchase a LTC policy at reasonable rates. My husband died without using his, as he was only in hospice facility for two weeks and the policy required 90 days before it kicked in. I did not get the premiums back! I still have my version of that policy (15 years now), and the rates have gone up to over $200/month to keep the same benefits. But it doesn't cancel if I keep the same rates, the benefits go down so that's what I decided to do. I also have a policy that I paid $65,000 cash for from money from the sale of our house after my husband died. If it isn't used for LTC, it is $100,000 worth of life insurance for the kids.
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IsntEasy Oct 21, 2018
These type of hybrid products (with a life insurance component) are more typical now.
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My Mom bought a long term care policy with a high premium...there was a clause on it that if not used after 15 years the money she paid in came back to her...I did not know this and a huge check came back in the mail for her. I called the insurance company thinking it was a mistake or a joke but they explained that it was like a life insurance policy. Better yet she had the option after cashing the check to continue the premium payments at a lower rate and still be covered for long term care. Please check the terms of the policy to see if you may have money coming back to you at some point as if you give up the policy you may be giving up the return money you may have coming to you.
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GraceLPC Oct 21, 2018
I would love to know the Company. Was there a name to this program.
My Dad had LTC insurance, which was a comfort, when there was hope he would get out of the hospital but need respritory support to heal. Unfortunately we never got to use it, but having it was a comfort.
But uncontrollable increases in costs can become prohibitive. Let us know the outcome.
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Prior to 2000, some Insurance Companies offered Long Term Care (LTC) policies that had a "Return of Premium" Rider attached to the LTC policy. However, many insurance companies discontinued the Rider in the 2000’s because they were concerned that the Rider might not be profitable.

Both my Dad and my Mom each had two (2) Long Term Care (LTC) Policies: one that had a “Return of Premium” Rider and one that did not.  Since my Dad died at home in 2007 and was never in a nursing home, Mom received the entire premium that Dad had paid for the LTC insurance policy that had the “Return of Premium” Rider.  Mom did not receive any return of premium from the LTC policy that DID NOT have the “Return of Premium” Rider.

According to https://www.thebalance.com/understanding-what-is-an-insurance-premium-4155239:

“The insurance company has to collect the premiums from many and make sure they save enough of that money in liquid assets to be able to pay the claims of the few. The insurance company will take your premium and put it aside, letting it grow for every year you don't have a claim. If the insurance company collects more money then what they pay in claim costs, operational costs and other expenses, they will be profitable.”
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The devil is in the details of the paperwork of the policy.

In my parents' case, any premiums paid in not used will be refunded. In the case of my father (died in 2010), my mother received the $50,000 (? I think) in premiums paid for him. He never used any LTC.

The same thing will happen with my mother's policy, if she never ends up using it (or doesn't use more than she paid in). BUT my parents never stopped paying in; I don't know what would have happened if they had.

I think this is unusual, though. I doubt someone could get back premiums paid years ago on a lapsed policy.
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Dianeb1953 Oct 18, 2018
Usually when someone needs long term care and submits a claim, premium payments will not need to continue. Basically you pay in until you need it, then when you need it, it starts paying out and you stop paying in.
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Mother had a policy for YEARS. She recently cancelled it, I do not know why. No refunds of payments. IF she'd tucked that $150 a month away in an IRA or somewhere she'd actually HAVE something.

Can't remember who it was with, as she had a shady financial advisor---he was a real crook, and my folks were so gullible. {sigh}
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I am in the same situation and trying to decide whether to drop the policy. I was told that the amount that I have paid in would be available for care payments if I discontinue the policy. I did not ask about a refund, but I think I will. I have been paying into it for close to 20 years already. My policy is with Genworth. Complaints probably depend on what state you live in.
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Dianeb1953 Oct 21, 2018
Just checked and no refund. Trying to decide whether to keep paying or just keep what I have already paid in for future care needs. Genworth has a very poor record of paying claims now with many, many, many complaints against them (Google Genworth LTC complaints to see). That is why I am thinking about not wasting even more money on this shady company. When I bought the policy 11 years ago, they were supposed to be the best and I was trying to be responsible.
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Some of your answers may be found by clicking on the topics link at the top of this page and finding the topic. You will find expert comments as well as others who posted on the same thread
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RinconRick Oct 18, 2018
Thanks MACinCT. I'm new here and will explore other areas of the site. Much obliged to you. Rick
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