Jason purchased long-term care insurance 20 years ago to alleviate his children from the burden of long-term care costs and ensure he was taken care of in his senior years if the need arose.
Jason paid his insurance premiums religiously, but when he became ill and required ongoing assistance, Jason’s (now adult) children assisted him in filing a long-term care insurance claim. They were shocked when Jason’s benefits were denied by the insurance company.
Jason and his children are not alone; this is a scenario repeating itself all too often and is becoming a significant concern for long-term care insurance policy holders.
It may appear that insurance companies have been surprised by the escalating cost of long-term care and have been doing everything in their power to reduce their losses. In fact, a major Canadian insurance provider recently stopped offering long-term care insurance altogether, while others have significantly reduced benefits and increased premiums.
When Can Insurance Companies Deny Long-Term Care Claims
In Jason’s and most long-term care policies, a person is considered dependent if:
- They cannot perform two or more duties of daily living without substantial assistance.
- Require constant supervision due to cognitive impairment to protect themselves for their safety and health.
An insurance company will deny your claim if you fail to meet their definition of dependent. You need to understand how activities of daily living and cognitive impairment are defined and if you are in fact meeting the criteria listed in the policy.
Read: How are activities of daily living defined in long-term care policies?
Jason moved in with his son because he required assistance in performing activities of daily living. However, the insurance company denied his claim, stating he was able to perform the said activities.
There are strict limitations periods in contractual agreements between parties where the limitation period could be one year or more. If there is no mention of a limitation period, the Ontario Limitations Act, 2002, provides the limitation period which is usually two years from the date of denial of the long-term care claim.
Since there was no mention of a limitation period in Jason’s long-term care insurance contract, he and/or his family must commence legal action within two years of the denial of Jason’s claim for long-term care.
At the point of denial, it would be beneficial to contact a lawyer and seek representation in the case against the insurance company. In Jason’s case, he requires stand-by assistance from another person (his son) to safely perform two or more of the activities of daily living, as described in his policy. This appears to fit the criteria of physical dependency, and Jason may be successful in challenging the denial with the help of a lawyer experienced in disputing and litigating long-term care insurance denials.
Legal representation is also essential when challenging long-term care policy denials based on an insurance company’s interpretation of cognitive impairment which we will discuss in a future blog.
Read: How is cognitive impairment commonly defined in long-term care policies?
If your long-term care insurance claim has been denied or terminated, contact Roger R. Foisy & Associates for a free consultation. Call us at (905) 286-0050 or fill out the form on this page.