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Tips for selecting long-term life insurance

February 8, 2012 12:00:00 AM PST
A lawsuit against a health insurer over a long-term care policy was filed on behalf of one senior citizen, but it's seeking class-action status. Here's advice on checking out long-term care policies.

Dr. William Hall, 87, of Upland thought he had planned his later years in life very well. He bought a long-term care insurance policy from the Senior Health Insurance Company of Pennsylvania (SHIP), but when he filed his first claim nearly three years ago, he got very little in return from SHIP.

"We bought this insurance with the expectation that it would help us bear the burden of caregiver cost," said Hall.

A burden is right: Hall's been paying out $95,000 a year for his care while SHIP has paid only $9,000 total. Now with the help of the group Consumer Watchdog and an attorney, Hall, who is a former chief of medicine at Kaiser Permanente in Fontana, has filed a lawsuit against SHIP for denying his claims.

"Dr. Hall has received an avalanche of letters over the last year or so, explaining exactly why he hasn't received the benefits that he deserves, and the explanations are absurd," said attorney Samuel Bruchey.

"Dr. Hall or his family would fill out the same information requested multiple times and the company would still say, 'There's nothing,' 'We need more information,' or 'We never got that information,' or 'Tell us the information again,'" said Consumer Watchdog Founder Harvey Rosenfield.

SHIP released a statement in response: "We are in the process of reviewing his complaint and we can assure you this will be handled appropriately. SHIP's sole mission is to pay eligible claims accurately and timely, and has established a very strong record of compliance," wrote Annette Gobrogge, vice president of human resources.

At some point in time in our lives, many of us are going to need long-term care just like Hall, but at an average cost of $70,000 a year, many of us may not be able to afford it without insurance.

Before you buy a policy, here's what you need to know.

  • Know exactly what the policy will and will not allow.
  • Factor in how many customer complaints the company has received.
  • Check out the insurer's history of premium hikes.
  • Since you'll be buying the policy decades before you need it, choose a financially strong company.