Conseco and Penn Treaty Long Term Care insurance companies
must be biting their nails to the quick, as the House
Committee on Energy and Commerce breathe down their necks
and the General Accountability Office closes in.
Conseco hired a great ad agency. I loved their long term
care insurance commercials. They were so funny! Yet every
time I watched them, I couldn't help but cringe. My
concern was that people would buy a Conseco policy, then
perhaps someday their rates would go up, or worse yet,
their claims might get denied. Clay and I knew that, as far
back as the 1990's, Conseco was selling relatively
inexpensive policies to lots of unhealthy people. Now,
approving "sickies" for long term care insurance seems
compassionate, doesn't it? Of course it does. I sure wish
companies would approve more, but that's not how insurance
works. Companies with smart actuaries know that insurance
can only work when there are more "low risk" policies sold,
than there are "high risk" sold. That way, more money is
coming in than going out. More premium payments, less
benefit pay-outs. That's how the "pool" of money held by
insurance companies stays strong.
When the high risk/low risk ratio is reversed, the money
pool is in danger of drying up. That was the problem we
saw, way back when. Clay never sold Conseco. He was
advised not to by his mentor, but he did sell a few Penn
Treaty policies to people who, due to health concerns,
would not have been approved by other companies.
Penn Treaty had decent policies, yet Clay always told his
clients that there was a good chance their premiums would
go up in the future, due to Penn Treaty's high risk/low
risk ratio and lower premium prices. Still, given the
choice between having no LTC insurance at all and the
possibility, no matter how great, of rate raises most
people chose the insurance. Would Clay have made the same
choice if he had the chance of being insured. You better
believe it"¦ He would buy a Penn Treaty policy today if
they would take him.
Even so, I think it's high time the long term care
insurance industry got a good once over. Rate raising and
refusing to pay-out, if only from a few companies, damages
the entire industry, not to mention consumers' well being.
If you diligently pay your premiums, year after year, and
you have a legitimate claim, you should expect the LTCi
carrier to pay-out, as per your contract. Paper shuffling
and other foot dragging techniques being used by a few
insurers are shameful.
Why has Congress waited so long to look into this
situation? Was the Insurance lobby too strong for the last
Congress? It may be political "low-hanging fruit" to rail
against the Evil Insurance companies during these
pre-election days, but I'm glad that Obama and Hillary have
the moxy to do so. The states haven't been doing a great
job regulating, so maybe this will get their tails in gear.
One last thing: 81 year old Mary Rose Derks has gotten a
lot of press. She's been in a nursing home since 2002 and
her long term care has cost her $70,000 or so. Articles and
news shows site her case, claiming that Conseco has not
paid her claim. I'd like to know where her LTCi agent has
been all this time. Isn't he helping her, fighting for her?
It's easy to get alarmed. Yet we don't know what Mary's
policy's contract wording was, so we don't know if Conseco
is in the right or if Mary Rose Derks has a valid claim.
There could be legal wording in the policy itself that
allows Conseco to not accept her claim. Conseco might have
found that Mary didn't disclose all of her health
conditions when she applied, therefore, nullifying her
contract. Or not. Maybe Conseco is simply trying to save a
buck at the expense of a fragile, little old lady. We
don't know. We only hear the plaintive cries of her family
so eagerly repeated through the Media.
But I bet Conseco wishes they had spent less on advertising
and more toward paying their claims now!
And let's remember: Long Term Care Insurance companies pay
out Billions of dollars in claims. Most LTCi companies
should be applauded for helping Americans during times of
great stress and need.
We shall see what these inquiries reveal.
About the Author:
Long term care insurance activist, CB Cotton, writes for
http://www.PrepSmar
Assistance Center, where you get Free Long Term Care
Insurance advice, comparative rate quotes and personal
guidance, all while safely at home in your favorite pajamas
and bunny slippers.
Saturday, June 23, 2007
Congress Scrutinizes Long Term Care Insurance
A New Leasee's Primer on Renters Insurance
Taking the leap and finally renting your own apartment also entails being ready for any emergency that may arise. If your first home is going to be rented, you need to look into all the kinds of insurance that will protect your property. Sure most residential buildings come with their own insurance policy, but these policies are not likely to cover certain occurrences - and that's where renters insurance comes in.
Renters insurance basically covers two things: 1) damage done to your property, and 2) damage you may do to others' property. In the case of damage done to your property, you can protect the items on your insurance inventory against unforeseeable trouble, such as flooding, earthquakes, vandalism or theft. This is why it is important to keep a detailed inventory of the items you want covered by your insurance. Especially important items, such as antique heirlooms or expensive jewelry, should be declared first of all.
One important thing to know is if your insurance company intends to reimburse your losses at "replacement cost" or "actual cash value (ACV)." The latter means the amount you spent in actually buying the insured item. If for example you bought a particularly valuable ring at $200 several years ago, ACV means the insurance will only cover your loss up to around $200, the amount you paid for the ring at the time of buying, when in fact $200 would be far below the market value of the ring in this day and age. However, this may be beneficial to you if your insured item was bought fairly recently. On the other hand, replacement cost allows for a little more flexibility. Both these reimbursement terms are subject to deduction, depending on the amount of use your insured item has been put through, and some other considerations.
This type of renters security could also take the form of allowance. For example, in the event that a disaster destroys most of your apartment home, making it unlivable, it is important to have some form of financial fallback that will cover the cost of staying elsewhere, while the insurance from the damage done to your property is being settled. Ordinarily, building insurance will not cover the additional living expenses incurred when living away from the building per se. It would be good to find a third party insurance provider that could help shoulder a good deal of the cost.
A good renters insurance could work both ways, too. You may find it a formidable ally should a liability lawsuit be filed against you. This could happen in case you accidentally cause injury to others, or damage other people's property.
Insurenters.com provides you with information on renters insurance related issues, the pitfalls and the best tips. We are dedicated to help you find your renters insurance. http://www.insurenters.com/
