For upper-middle aged and older Americans, shopping for long-term care insurance can include many challenges in an attempt to purchase the best policy. It can be exhausting sifting through complicated contacts, high charges and fees, and expensive premiums. Add the potential for insurance fraud to the mix, and it can be devastating. Given the need for long-term care services continuously increasing, the threat of long-term care insurance fraud rises as well. To keep your long-term care plan on the right track, keep an eye out for these red flags.
You should always check with your state’s insurance department to validate the insurer prior to completing the purchase of a long-term insurance policy. Ensure that they are a legitimate company that is licensed to sell insurance. Some insurance scammers with attempt to sell you fake policies that will accept your premium, but won’t pay out any money when the insurance is eventually needed.
Pay attention to insurance companies with policies that have extremely high premium costs and those that try to sell you two overlapping policies when you only need one. A form of long-term insurance scams are policies that favor making the most amount of money possible, without taking into consideration any of your healthcare needs.
If an insurer tries to persuade you into upgrading your policy to a new, more expensive one, stay alert and review the new policy thoroughly. Insurance scammers will attempt to coerce you into cancelling your current policy and purchasing a new premium that is more expensive, but has no additional benefits compared to your current one. This is especially important to be on the lookout for, as any premiums paid out on the current policy will be forfeited once it is cancelled. Any pre-existing conditions that you bring into the new policy that were not part of the previous one may increase the premium cost as well.
Per Brian Mahany, “Long-term care insurance fraud can also include falsely representing benefits of a long-term care policy (i.e., saying they will cover all your long-term care needs) and high-pressure pitches to sell expensive policies (the insurer will warn you about being a burden on your kids).” Be on the lookout for insurers that try to pitch you on a policy using these tactics.