Long-term care insurance claims

Types of complaints we see

Most long-term care insurance (LTCI) policies pay a benefit if the customer can’t do a specific number of ‘activities of daily living’ (ADLs).

Examples of ADLs in LTCI policies are:

mobility – moving from one room to another and getting in or out of a chair or bed
​washing – washing and maintaining personal cleanliness
​dressing – putting on and taking off clothing
​feeding – ​eating pre-prepared food and drink
​toileting – getting on and off the toilet
​continence – controlling bowel or bladder function

When a customer makes a claim, insurers use medical evidence, like GP notes and a specialist report on the customer’s ability to perform the ADLs independently. If, in the insurer’s opinion, the evidence shows the customer is able to perform a set number of activities (usually two or three), it will decline the claim.

We see complaints from customers who:

• consider themselves to have a disability and feel the insurer has turned down their claim unfairly
• say the insurer mis-sold the policy to them 
• have experienced a delay in their claim being handled by the insurer

What we look at

We’ll look at the available medical evidence to see whether we think your decision to decline a claim is fair and reasonable in the circumstances. We might decide the decision isn’t fair if we think you’ve only relied on evidence provided by your own in-house health assessor, rather than getting the opinion of the customer’s treating doctors.

As long as the policy terms are clear, we wouldn’t usually ask you to pay a claim unless the ADL definitions had been met as stated.

The Insurance Conduct of Business Sourcebook (ICOBS)  places a responsibility on you to handle claims promptly and fairly. So, for example, even if the policy terms have an exclusion that’s relevant to the complaint, we’ll look at whether it’s fair and reasonable for you to rely on it in the individual circumstances.

Putting things right

If we think there’s enough evidence to show the customer can’t perform the set  number of ADLs, we’ll ask you to pay the claim plus 8% simple interest from the date each payment was due (as they’re monthly benefits) until it’s paid.

If we decide there isn’t enough evidence to show conclusively one way or another if the policy terms have been met, we may ask you to arrange an independent medical examination. If we do this, we’re likely to tell you to decide the claim based on the conclusions of that medical report.

If a customer dies while you’re considering a claim

In this case, we’d look at the medical evidence to see if the deceased is likely to have qualified for benefit while they were alive. If so, we may ask you to pay the benefit to the deceased’s estate from the point at which we consider the claim could, or should, have been accepted, until the date of death.

Delays

Because of the nature of long-term care insurance, policyholders often claim towards the end of their lives. This means that unnecessary claim-handling delays can be very significant. The customer may be unable to continue to live independently, so decisions need to be made quickly about their future care. They, or their families, may have to pay for care while waiting for the insurance decision, which can add up very quickly.

If there’s evidence that the claim was delayed and this caused the customer stress or inconvenience, we may award compensation for this.

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