Can mom's long-term care insurance cancel her?

A fellow caregiver asked...

My mother, 82, suffered trauma to the leg from a shopping cart incident just before leaving her home in Missouri to visit me in Georgia for a few weeks. Once here, she began to see doctors in Georgia, as the wound opened up. She ended up being here over a year (unexpectedly) under outpatient wound care, receiving bi-weekly wound wraps, and in a boot, experiencing much pain. During that time, she missed some payments on her long-term care benefits. (Remember, she did not plan a trip of this length, and did her best to keep up with all of her financial obligations from long distance, with only the help of neighbors sending her mail as best they could because the post office totally screwed up the temporary mail forwarding.)

Consequently, the long-term care insurance cashed one of her checks, which was late, and THEN eventually sent her a refund and canceled her policy, which she had consistently paid on for 15 years up to that point. The company refuses to reinstate the policy, even after a letter from an attorney indicating the cause for late payments. Is there ANY advocacy group we can contact to either recoup the money paid or get a new policy? (At her current age, we are being told that she cannot get this type of plan.)

Greatly appreciative of any help/advice suggested.

Expert Answer

Duane Lipham is a certified long-term care (CLTC) consultant who writes extensively on long-term care insurance issues. Lipham has also been a caregiver for members of his own family.

Older policies often had provisions for reinstating long-term care insurance. Many would allow for re-instatement up to 6 months after the policy had lapsed if the reason was due to a cognitive OR a physical impairment. (Most newer policies only allow for re-instatement in the event of a cognitive impairment.) You should review the re-instatement provision in the policy and see if it includes lapses caused by a physical impairment.

Secondly, the best group/person to call would be the Missouri Department of Insurance. You can file a complaint with the Department and they may be able to pressure the insurer into re-instating the policy. Here is a link where you can get more information about this: http://insurance.mo.gov/consumer/complaints/index.htm

Your situation illustrates why I often make the following recommendations to my clients:

1) Pay long-term care insurance premiums via an automatic, electronic funds transfer every month.

2) Take advantage of the "third party notification" feature in most LTCi policies. This can help prevent a policy from lapsing because up to 3 people can be notified if your LTCi premium is late.