Across the United States, individuals and families who purchased long-term care (LTC) insurance decades ago are now discovering a harsh reality: the coverage they paid into for years is being denied or delayed just when they need it most. As America’s aging population begins to exercise their benefits, major insurers are refusing to honor policies, trying to manipulate the fine print, and dragging claimants through endless red tape.
Policyholders expected protection, dignity, and peace of mind. Instead, they are met with bureaucracy, confusion, and outright denial. It is no surprise that a growing number of these policyholders are taking legal action. The lawsuits reveal a disturbing trend of systemic misconduct, exposing insurers that prioritize profits over people.
At Sandstone Law Group, our team is committed to fighting for those who have been wronged. If your long term care insurance claim has been delayed, denied, or improperly processed, do not wait.
Insurance companies count on silence. Contact Sandstone Law Group today at (602) 615-0050.
Why LTC Insurers Are Being Sued
The Insurance Industry's Broken Promises
When LTC insurance policies were first marketed in the 1980s and 1990s, insurers underestimated how long policyholders would live and how expensive long-term care would become. These companies offered low premiums with the promise of future support, assuming few policyholders would ever file claims.
Now that claims are rising, insurers are responding with aggressive denials, unjustified rate increases, and manipulative policy interpretations. In many cases, they are relying on outdated actuarial models while ignoring their contractual obligations. The result is a deliberate effort to reduce payouts at the expense of vulnerable individuals.
Common Legal Allegations
Policyholders are filing lawsuits based on a range of legal violations, including:
- Wrongful denial of valid claims
- Improper interpretation of policy terms
- Excessive and unlawful premium hikes
- Breach of contract and bad faith practices.
These allegations reflect a coordinated industry effort to prioritize shareholder profits by minimizing obligations to policyholders.
Notable Cases Against Major Insurers
Unum Group
Unum has a long history of regulatory scrutiny and legal action, especially within the Long-term disability space, which may show what is to come in long-term care:
- Despite paying his premiums for over 17 years, Unum denied a California man’s thoroughly supported, valid claim by misinterpreting medical records and intentionally employing a biased physician to support their denial. The court found this behavior fraudulent and malicious and awarded the plaintiff $31.7 million.
- In 2004, Unum came under intense review from state regulators, prompting a comprehensive re-examination of over 200,000 claims. The result included a fine exceeding $15 million and significant changes to their policies. A year later, California imposed an additional $8 million fine and mandated the revaluation of 26,000 disability cases in that state alone. The review uncovered more than 25 separate violations of California insurance law.
- In 2008, the company agreed to a $676 million national settlement after a multi-state investigation revealed systemic mishandling of disability claims.
While Unum’s LTC denials and misconduct have been less documented, this is likely to change, and Unum is already seeing and increase in scrutiny for their long-term care insurance practices:
- In 2016, Unum agreed to a $46 million settlement in a class action lawsuit filed in California. The lawsuit alleged that Unum miscalculated annual inflation increases and improperly set policy anniversary dates, resulting in policyholders being denied the full benefits of their LTC policies. This settlement addressed systemic issues in Unum's LTC benefit calculations.
- In a new agreement with Maine insurance regulators, Unum Group committed to increasing its statutory long-term care insurance reserves by $2.1 billion over seven years.
- In Maramonte v. Unum Group, the plaintiff alleged that Unum acted in bad faith by refusing to honor the terms of the LTC policy, leading to a lawsuit seeking the owed benefits and additional damages. Mrs. Maramonte, an 86-year-old woman, suffered from a range of debilitating health conditions—including major neurocognitive disorder (dementia), colon cancer, severe depression, and malnutrition. She frequently became disoriented, required supervision for her safety, and was at high risk for falling. Like many aging Americans, she had wisely purchased a long-term care insurance policy designed to provide financial support if she ever needed help with activities of daily living. Despite the clear medical need for care, her insurance provider, Unum, denied her claim for long-term care benefits. The case underscores concerns about Unum's claim handling practices in the LTC insurance sector.
The company’s long record of settlements and regulatory infractions underscores the systemic nature of its misconduct.
Genworth Financial
Genworth has faced multiple class actions for excessive rate increases, including a $25 million settlement in 2019.
From October 30, 2013, to November 5, 2014, Genworth repeatedly told investors that it had conducted a “broad and deep” review of its LTC insurance reserves and that those reserves were “adequate, with a comfortable margin.” These public statements created a perception of financial stability and reliability, even as Genworth’s core LTC business faced mounting pressure from underpriced policies, rising claims, and demographic shifts. Genworth later disclosed the devastating outcome of its delayed reserve review: the company needed to increase LTC reserves by $531 million.
The $531 million reserve charge was a clear signal that Genworth had significantly underestimated future liabilities. This was a misstep that harmed the very policyholders relying on LTC benefits for their aging care needs.
Genworth’s series of misrepresentations gave rise to a class action lawsuit under Sections 10(b) and 20(a) of the Securities Exchange Act. The case alleged that Genworth and certain executives knowingly or recklessly misled investors about the condition of the LTC segment, artificially inflating the company’s stock price and concealing its growing financial vulnerabilities.
In March 2016, Genworth agreed to a $219 million settlement, one of the largest securities class action recoveries ever in Virginia. The court granted final approval of the settlement in July 2016, concluding the litigation and fully disbursing funds to affected investors. The lawsuit had uncovered serious internal failures in corporate governance and financial reporting, as well as a clear disconnect between Genworth’s public reassurances and its internal knowledge of risk exposure in LTC insurance.
While Genworth was misleading Wall Street, it was also drawing sharp criticism from policyholders and regulators for its handling of LTC claims. These included:
- Allegations of "massive fraud" in reserving practices, allowing Genworth to upstream dividends from under-reserved LTC portfolios.
- Premium increases of up to 140%, triggering a separate $25 million class action settlement with affected policyholders.
- Accusations that Genworth intentionally delayed or denied legitimate claims in order to reduce liabilities.
Genworth has continued to be accused of wrongfully terminating policies in order to cause Reinstatements and forfeitures on policyholders.
MetLife
MetLife’s experience with long-term care insurance highlights the challenges that can arise when financial projections don’t align with the realities of aging policyholders’ needs. Although the company exited the long-term care market in 2010, many of its older policies remain in force—and the individuals who have paid premiums for years often face difficult hurdles when trying to access the benefits they expected
At the center of MetLife’s LTC litigation history is a class action lawsuit over the “Reduced-Pay at 65” rider. This rider promised policyholders they could pay higher premiums prior to age 65 in exchange for significantly reduced premiums thereafter. This was a feature marketed as a form of long-term affordability and stability for retirees.
But once policyholders crossed that age threshold, many were blindsided by steep premium increases, some as high as 102%. Instead of the financial relief they had counted on, seniors found themselves with an impossible choice:
- Pay the inflated premiums,
- Reduce their LTC benefits, or
- Let their policy lapse altogether, forfeiting years, often decades, of investment.
This deception triggered the class action Newman v. Metropolitan Life Insurance Company, in which plaintiffs alleged that MetLife had violated the terms of the rider and its contractual obligations. The case concluded with a settlement requiring MetLife to cap premiums at no more than 50% of their pre-age 65 levels for all class members. Additionally, the company agreed to refund 30% of all increased premiums collected after age 65.
The “Reduced Pay at 65” lawsuit is emblematic of a potentially larger pattern in MetLife’s LTCI practices. As with other insurers, MetLife appears to have underestimated the costs of providing LTC benefits, failing to predict:
- Rising life expectancy
- Escalating healthcare costs
- Persistently low interest rates, which reduced returns on reserves.
As these financial pressures mounted, MetLife has arguably responded by shifting the burden onto policyholders through rate hikes, benefit reductions, and stricter claims handling. This pattern of behavior eventually led MetLife to cease selling new LTC policies altogether in 2010, quietly exiting the space rather than addressing its broken pricing models.
Along with Unum Group and Genworth Financial, MetLife faced government scrutiny for how it managed its LTC business. Regulators and class action plaintiffs alike zeroed in on:
- Claims denials involving technical interpretations of policy language
- Steep premium increases following decades of stable pricing
- Failure to deliver on promises marketed to policyholders for retirement planning.
What makes MetLife’s long-term care rate increases particularly impactful is their timing, often affecting retirees during a critical financial stage of life. Many policyholders were already living on fixed incomes and had planned their retirement budgets around the assumption that their LTC premiums would decrease at age 65. For some, the resulting financial strain has affected not only their budgets but also their sense of security and ability to plan for care.
John Hancock
John Hancock’s mishandling of LTC policies has triggered lawsuits and the attention of state regulators for years.
In one of the most significant enforcement actions in the long-term care insurance space, John Hancock agreed to a $26.3 million settlement with the New York State Department of Financial Services (DFS) in 2022. The regulatory investigation revealed that from 2001 to 2019, the company wrongfully terminated 156 long-term care insurance policies, resulting in over 27,000 days of unpaid benefits for elderly policyholders.
Many of those impacted had paid into their policies for years and became reliant on the expected coverage when they needed care the most. But instead of honoring those policies, John Hancock terminated them without following proper legal procedures.
As part of the settlement, the company was required to:
- Provide restitution to affected policyholders or their beneficiaries;
- Contribute to New York’s Medicaid program, which was forced to step in where Hancock failed;
- Pay a civil penalty to the state.
Many of Hancock’s terminated policies were decades old, written with outdated and often vague language. Policyholders struggled to interpret benefit triggers, elimination periods, and care documentation requirements.
In some cases, this complexity contributed to claim denials by Hancock based on technical terms or perceived “lapses” in coverage. Hancock was able to deny coverage and shed liabilities, sometimes without the policyholder even realizing what went wrong. For individuals seeking benefits due to cognitive decline or the need for assistance with multiple activities of daily living, this lack of clarity could result in significant delays or missed opportunities for coverage.
The New York DFS emphasized that insurance companies must operate in full compliance with state law, especially when the lives and well-being of elderly policyholders hang in the balance. The department made clear that it will continue aggressive oversight to ensure these practices do not persist in the LTC market.
In late 2023, John Hancock entered a $4.4 billion reinsurance agreement with Global Atlantic, one of the largest such transactions ever in the LTC sector. The deal is designed to shift a significant portion of its legacy long-term care insurance liabilities off its books and onto a third party. This raises troubling questions for policyholders:
- Who will manage their claims now?
- Will claims be subjected to even more layers of review or denial?
- What oversight exists when care decisions are outsourced to profit-driven reinsurers?
Other Major Players
- Prudential: Ordered by the Department of Labor to revise life insurance practices and reprocess claims.
- Continental Casualty (CNA): Sued for allegedly deceptive denials based on facility qualifications.
- Bankers Life: Faced a class action in Oregon for elder abuse, fraud, and breach of contract.
Insurance Company Tactics We Routinely Overcome
Exploiting Policy Complexity
LTC policies are notoriously difficult to interpret. Insurers use vague terms and outdated policy language to deny claims. Many policies contain ambiguous requirements about care providers or benefit triggers, leaving policyholders unsure of what is covered.
Regulatory Loopholes and Delays
LTC policies are regulated at the state level, meaning each state has different rules. Insurers exploit these differences and introduce unnecessary appeals processes to stall payouts. In some cases, companies create appeal mechanisms even when not required by policy; a tactic used to delay resolution.
Outdated Assumptions About Policyholders
Many insurers count on claimants being too ill, elderly, or overwhelmed to fight back. Documentation requirements, elimination periods, and repeated information requests are not random. They are designed to frustrate policyholders into giving up.
What Policyholders Can Do
Know the Warning Signs
- Long delays in processing your claim
- Vague denial letters
- Repeated requests for additional documents
- Claims denied despite evidence of care needs.
These are not coincidences. They are signs of a company trying to avoid paying.
Get Legal Help Before You Appeal
Appealing is not always required. Many LTC policies do not mandate an appeal process. Insurers often offer appeals, anyway, hoping you will delay legal action. At this critical point, you need legal guidance.
Sandstone Law Group offers consultations to review your situation and help you determine the best path forward.
Contact Sandstone Law Group Today
The growing wave of lawsuits against LTC insurers is not a passing trend. It is a reckoning. For too long, insurers have avoided accountability, hiding behind fine print and delay tactics. But as more policyholders come forward, the legal system is beginning to respond.
If you or a loved one is facing unjust delays, denials, or rising premiums, know that you are not alone. Sandstone Law Group is here to help you hold these companies accountable.
You held up your end of the contract. Now your insurer is trying to back out when it matters most. Our firm has helped countless clients challenge wrongful denials and recover the care they deserve. Contact Sandstone Law Group today at (602) 615-0050.