Long Term Care Insurance Litigation Ended in Missouri

I just read an article on a lawsuit that was just settled for rate increases on a few long term care insurance policies sold in Missouri.  The Kansas City Star reports that a $15 Million Dollar law-suit against American Heritage Life Insurance Company (co-insured by Mutual of Omaha) and Wakely & Associates Inc was settled which is great news for thousands of Missourians who hold their long term care insurance policies.  The article published by The Kansas City Star found here said this law suit stemmed from complaints from policy-holders that the fact that there could be substantial rate increases in there long term care insurance policies were not properly disclosed.

I don't know the exact details in the above mentioned case so I'm not talking specifically about those companies above.  What I do know is after being in the long term care insurance industry for 12 years what I noticed years back is that the smaller long term care insurance companies would have pricing structure lower that the mainstream carriers such as GE Capital (now Genworth Financial), John Hancock, Met-Life, etc. which at the time lead me to feel that they might be under pricing the risk possibly to attract business.  This makes sense if you think about it since the smaller carriers typically might not have the brand name recognition of the bigger players to attract business and have to sell on price to get deals vs. those brand name blue-chips.  I've also have noticed that just in the past 5 years or so that companies now force the client to sign in multiple areas on the initial application that rates have a good chance of going up in the future.  Where as in the past the agents were supposed to of told their clients that rates could go up and it was mentioned in the policy, there was not specific sheets to sign on the application on future potential rate increases like there is now with most carriers. 

To the companies defense though, long term care insurance is still a relatively new product and they are just now beginning to get a hold of the actuarial data to help ensure that a profit is made on these policies.  You want your insurance company to make a profit because a company making a profit means a more stable premium for you the policy holder in most cases.  This is no excuse to mislead the public for the carriers that did so and I'm happy that the people in Missouri were taken care of in this case. 

LTCtree has been around for 12+ years and I feel that some bottom feeder carriers mislead consumers with low rates up front and then jack them up a few years later.  What this practice is essentially doing is forcing the people to drop the coverage because they cannot afford to pay the much higher premiums anymore.  When this happens it's an insurance companies dream because they are now off the hook with the risk and have collected all those premiums that were paid leading up to the person dropping the insurance.  

Let me be clear, I'm certainly not saying that all insurance companies are bad; however what I am saying is do your homework and research the financial strength of the long term care insurance carrier before you buy.  If you are in good health I'd say stick with a blue-chip name because the name brand companies have that house hold name for a reason...they have made a habit of treating people fair for the most part in the past or they would not have that name brand appeal that you recognize.  Does this makes sense?  There is a direct correlation of high financial ratings with the ratings agencies like AM Best, Moody's, Standard & Poor's, etc. so BEFORE you buy get the current financial data on the company you are considering first.

At LTCtree we work with most all the blue-chip carriers and have access to the real-time financial strength ratings of every insurance company that is rated in the country.  Those ratings with the carriers we quote you and any you might request come standard with every quote packet we mail out.  Our goal is to shop the entire long term care insurance markets and match the best company at the bet price.  If you'd like your quotes simply fill in the form below.  Thanks for reading to day...we really appreciate it.