Imagine your mother falling Ill and needing home care. Many years earlier she purchased a long-term care insurance policy and faithfully paid the premium. She never wanted to put the burden of her health care costs on her children.
You put in a claim but the insurance company never makes any payments . You call the insurance company and send them document after document. They deny the claim on the reason of "the claim being filed was too late." The denials change each time, often citing provisions in the policy that do not exist, and often contradicting previous denials.
The case of Mary Rose Derks from Montana attracted congressional attention after the New York Times highlighted her plight at the hands of insurance company Conseco. Her family had to sell their business after Conseco denied Mary’s claim for more than four years. Insurance companies embrace delay tactics to avoid paying claims. According to Mary Beth Senkewicz, a former senior executive at the National Association of Insurance Commissioners (NAIC), "the bottom line is that insurance companies make money when they don’t pay claims….They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die."
Most people file for insurance claims when they are most vulnerable. Filing a claim with your insurance company usually follows an upset to everyday life, that could involve a car accident, a tree falling on your house, or hospitalization from a serious illness. For the insurance company it is business as usual. Many insurance companies routinely delay claims to try to avoid paying. By delaying as long as possible, the insurance company knows many of its claimants will eventually give up, or in some cases die.
At AIG, claim supervisors have locked checks in safes until claimants complained, delaying payments for a year, and disposing of important correspondence during routine "pizza parties."
Other long-term care insurers, such as Conseco, have had its employees testify to a variety of tricks used to deny claims. In the words of former agent Betty Hobel, the company "made it so hard to make a claim that people either died or gave up."