Long-term care insurance (LTCI) provides a valuable safety net for policyholders, offering coverage for services like in-home caregiving, assisted living, and nursing home care. However, when a claim is denied, the consequences can be devastating.
Not only is the financial burden overwhelming but the stress and frustration of fighting a powerful insurance company can feel insurmountable. When your insurer fails to uphold their end of the deal, filing a lawsuit may be necessary to secure the benefits you deserve.
While the idea of legal action may seem intimidating, understanding the process and having a trusted long-term care insurance lawyer on your side can make all the difference.
This blog is a guide for policyholders considering lawsuits against insurers for long-term care insurance denials. We’ll cover the following topics in depth:
- Why Lawsuits Are Necessary in LTCI Denial Cases
- Common Reasons for LTCI Claim Denials
- The Legal Process for Filing a Lawsuit Against Insurers
- The Role of Evidence and Documentation in Your Case
- Choosing the Right Attorney for Your LTCI Lawsuit
- What to Expect During the Litigation Process
- How Sandstone Law Group Can Help You Win Your Case
- Taking Action Today to Protect Your Rights
After reading this, you’ll have the knowledge and confidence to take the next step in fighting for the care you need and the benefits you’ve been promised.
Why Lawsuits Are Necessary in LTCI Denial Cases: What You Need to Know
Filing a lawsuit against an insurer is a last resort, but it often becomes necessary when policyholders face unjust denial of their long-term care insurance claims. Here’s why lawsuits play such a critical role in holding insurers accountable.
1. Insurers Prioritize Profits Over People
Many insurance companies are highly profitable corporations, with billions in annual revenue.
To maintain these profit margins, insurers may intentionally deny or delay claims, hoping policyholders will give up due to frustration or financial strain. Legal action forces these companies to confront their obligations and fulfill their contractual promises.
2. Exposing Unfair LTC Practices
Lawsuits not only benefit the individual policyholder but also shine a light on broader unethical practices within the insurance industry. Filing a lawsuit against your insurer can send a powerful message, potentially creating changes that help others in similar situations.
3. Securing the Long-Term Care Benefits You Paid For
You’ve paid your LTCI premiums for years, believing you’d be protected when the time came to access long-term care. When insurers refuse to honor their agreements, a lawsuit may be the only way to recover the benefits you’re entitled to.
While challenging a massive insurance company may seem daunting, it’s important to remember that you have legal rights and options.
Common Reasons for LTCI Claim Denials
Insurance companies often cite the same types of reasons when denying LTCI claims, many of which are rooted in their aggressive efforts to reduce payouts. Here are the most common explanations insurers provide and why many of them don’t hold water.
1. Eligibility Issues Meeting the Benefit Trigger
Most LTC policies only pay out once the insured meets specific functional or cognitive impairment thresholds—commonly referred to as “benefit triggers.”
- Failure to Meet ADL Requirements: To qualify, a person typically must be unable to perform at least two or more Activities of Daily Living (ADLs)—bathing, dressing, toileting, transferring, eating, or continence. Insurers may argue that the individual can still perform these tasks independently. These assessments are often conducted by LPNs (sometimes even remotely via services like HelperBees), and their limited evaluations are used to justify a denial.
- Cognitive Impairment Denials: Even with diagnoses such as Alzheimer’s or dementia, insurers may claim the impairment isn’t “severe enough” or that substantial supervision isn’t needed.
- Denials for Lack of “Substantial Assistance” or “Supervision” Needed: Insurers may exploit ambiguity to deny claims, arguing that only “standby” or intermittent help is needed.
2. Policy Lapses
Insurers may claim your policy is void due to a missed payment, even for a minor, unintentional oversight. However, many states have laws that protect policyholders from losing coverage due to small or accidental lapses.
Some states (such as Arizona, California, Washington, Virginia, Delaware, Indiana, Texas and North Carolina) have protections in place for policyholders regarding unintentional lapses in long-term care insurance policies. According to Arizona Administrative Code § R20-6-1005:
- Notice of Lapse: Insurers are required to provide written notice of a potential lapse or termination for nonpayment of premiums at least 30 days before the effective date. This notice must also be sent to any designated third-party recipient, if applicable.
- Reinstatement Option: Policies must include a provision for reinstatement if the policyholder can prove they were cognitively impaired or had a loss of functional capacity before the grace period expired. This reinstatement option is available for up to five months after termination, allowing the policyholder to pay past-due premiums if necessary.
These rules are designed to protect policyholders from losing coverage due to minor or unintentional oversights, especially in cases where cognitive or functional impairments are involved
3. Facility or Provider Doesn’t Meet Policy Terms
Insurance policies often limit coverage based on where care is provided and who provides it. Claims may be denied if the facility isn’t explicitly covered—for example, some policies list “nursing homes” but exclude assisted living facilities, forcing policyholders to relocate unnecessarily. Coverage is also frequently denied if care is provided by unlicensed individuals, such as family members or private aides, even if the care meets or exceeds standards. Additionally, while policies may cover skilled nursing, they often exclude custodial care—assistance with daily activities—which is typically the most needed type of support.
4. Policy Language and Exclusion Tactics
For older policies, insurers may exploit outdated or vague language to justify denials. This is especially common with LTCI plans purchased decades prior. They may cite exclusions for pre-existing conditions or argue that the care requested—like memory care or hospice—isn’t clearly covered. Some wrongly apply a “medical necessity” standard, even though LTC benefits are based on functional or cognitive impairment, not medical treatment. In other cases, policy changes over time—through amendments or renewals—create confusion about what’s included, leading to unexpected denials.
Understanding the reason behind your denial is the first step in countering it effectively.
The Legal Process for Filing a Lawsuit Against Insurers
Filing a lawsuit may sound overwhelming, but breaking the process into manageable steps makes it easier to understand. Here’s an overview of how legal action unfolds.
Step 1: Talk to a Long-Term Care Benefits Attorney
Your first move should be to consult with an experienced LTCI attorney, like our legal team at Sandstone Law Group. Your long-term care insurance lawyer will:
- Discuss your long-term care denial
- Review your LTC policy
- Evaluate what legal action to take
Step 2: Pre-Litigation Review
Before formally filing a lawsuit, your long-term care insurance lawyer will often attempt to resolve the issue through negotiation or appeals. This step can sometimes lead to favorable resolutions without the need for court proceedings.
Step 3: Filing a Long-Term Care Complaint
If pre-litigation efforts are unsuccessful, your attorney will file a formal complaint in court to address the long-term care benefits that were denied.
The complaint outlines your case, including claims of breach of contract or bad faith by the insurer.
Step 4: Discovery Process
Both parties exchange evidence in a phase known as discovery. This includes reviewing documents, depositions, and any other information relevant to the case. Your attorney will use this stage to gather proof of the insurer’s wrongdoing.
Depositions are a key part of the discovery process, allowing attorneys to question witnesses under oath. These sessions often uncover inconsistencies or weaknesses in the insurer’s defense, which can be crucial when building a strong case.
Expert witnesses may also play a significant role during discovery. Your attorney might collaborate with medical experts, insurance industry specialists, or financial consultants to provide professional opinions and clarify complex issues. These expert insights not only support your claim but also demonstrate the insurer’s failure to uphold their obligations, adding substantial weight to your case.
Step 5: Settlement Negotiations
During settlement negotiations, attorneys use carefully crafted strategies to strengthen your position. They present compelling evidence, such as your policy terms, medical records, and communication history with the insurer, to demonstrate the validity of your claim.
Additionally, they highlight the potential risks the insurer faces if the case goes to trial, including negative publicity, higher financial liability, and the possibility of setting an unfavorable precedent. These tactics encourage insurers to come to the table with a serious and reasonable offer.
Settling offers several advantages for policyholders. It provides a faster resolution, eliminating the prolonged stress and uncertainty that come with ongoing litigation. It’s also more cost-effective since it avoids the additional expenses associated with a trial.
However, it’s crucial to ensure that the settlement amount fully covers your needs, including past expenses and any future care requirements. Your LTC attorney will carefully evaluate settlement offers to ensure they adequately compensate you and protect your rights, so you can move forward with confidence.
Step 6: Trial (if Necessary)
If settlement talks fail, your case will proceed to trial. At this stage, your attorney will present evidence, call witnesses, and argue your case before a judge or jury.
The Role of Evidence and Documentation in Your Case
Evidence is the backbone of any successful LTCI lawsuit. Here’s what you’ll need to build a compelling case.
- Your Policy: A thorough analysis of your insurance policy is essential. This includes the original agreement, any amendments, and detailed terms that outline your coverage.
- Medical Records: Documentation from your healthcare providers will demonstrate the necessity of your care and rebut the insurer’s claims.
- Appeal Correspondence: Any letters, emails, or phone records between you and the insurer can serve as evidence of bad faith practices or attempts to delay payouts.
- Expert Opinions: Your LTC attorney may enlist medical or insurance experts to testify about why your care should be covered under the policy.
Choosing the Right Attorney for Your LTCI Lawsuit
Deciding on the right legal representation is a critical step. Here’s what to look for in an LTCI attorney.
1. Experience with LTCI Cases
You need a lawyer who focuses their practice on LTCI lawsuits and understands the unique challenges of these cases. Erin Ronstadt and Kyle Shelton’s extensive work in disability and insurance law makes them highly trusted advocates in this space.
2. Track Record of Success
Look for attorneys with a history of favorable outcomes in insurance disputes. Client testimonials can offer valuable insight into their abilities.
3. Compassionate Client Care
Facing a lawsuit is stressful, so choose a lawyer who prioritizes communication and genuinely cares about your well-being.
4. Resources and Support
A strong legal team, like Sandstone Law Group, has the resources to go up against powerful insurers, offering you the best chance for success.
What to Expect During the Litigation Process
Litigation can be lengthy and complex, but knowing what to expect can ease your concerns.
- Timelines: Lawsuits can take months or even years, depending on the complexity of your case and the insurer’s tactics. However, most cases are resolved far sooner through settlements.
- Your Involvement: Your attorney will handle most of the heavy lifting, but you’ll be involved in critical decisions, such as approving settlement offers or preparing for depositions.
- Challenges: Insurers may use delay tactics or aggressive defense strategies, but your lawyer will be prepared to counter these moves.
How Sandstone Law Group Can Help
With deep experience in LTCI lawsuits and commitment to clients, Sandstone Law Group stands out. We have successfully handled numerous insurance disputes, delivering results that restore financial security and peace of mind to their clients.
You’re not just another case to our legal team; we’re invested in ensuring you feel heard, supported, and empowered throughout the process.
Taking Action Today to Protect Your Rights
If you’re facing a denial from your long-term care insurer, don’t wait to take action. Time is of the essence, and building a strong case requires immediate effort.
Contact Sandstone Law Group today to schedule a free consultation. The team will guide you through every step, from reviewing your denial letter to securing the benefits you rightfully deserve.