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Is your loved one a victim of post-claim underwriting?

On Behalf of | Mar 31, 2021 | Denied Insurance Claims

The insurance industry is notorious for denying claims that otherwise should be granted. Sure, sometimes they rightfully deny claim, but more often than not they try to cut corners so that they can protect their bottom line. This is to be expected to a certain extent since insurance companies are businesses, but dealing with these claims in bad faith is against the law and unacceptable.

Bad faith runs rampant in the long-term care insurance industry

While bad faith claims have been a major area of litigation for decades in the insurance field, one subsection of the industry is set to see a sharp increase in these kinds of claims in the years to come. This is because long-term care insurance was pitched to Baby Boomers as a way to protect their future interest perhaps with little realization that approximately 70% of individuals 65 and older will end up needing some form of long-term care. So, while relatively few of these long-term insurance claims have been filed, the industry is poised to see billions in claims in the years to come.

In recognition of the financial stranglehold their about to face, many insurance companies have tightened their claims practices, issuing more denials then they should. So, if you or a loved one has been subjected to a long-term care claim denial, then you need to know what to look for to protect your interests.

Beware of post-claim underwriting

One way that insurance companies try to avoid paying out these expensive claims is by engaging in post-claim underwriting. Here, an insurance company asks very little of you or your loved one upfront in order to secure your business. Sometimes the application contains vague or confusing questions that leave little, if any, room for you to explain why you answered the way you did. The insurance company then continues to collect proceeds from you in the form of premiums, having exerted very little or even no effort in obtaining and maintaining your business.

Then, once you or a your loved one files a claim, the insurance company conducts a thorough investigation of your or your loved one’s medical condition, looking for evidence that contradicts the answers provided in the insurance policy application. If a discrepancy is found, then the claim is typically denied, thereby saving the insurance company extensive amounts of money and leaving you and your loved one is a dire financial predicament.

Oklahoma’s ban on post-claim underwriting

Oklahoma law goes a long way toward preventing post-claim underwriting. In pertinent parts of the statute, insurance companies offering long-term care policies are required to ask clear and unambiguous questions and request details about medication. The law also restricts insurance companies’ ability to rescind policies or deny claims. Essentially, the law seeks to place the burden on insurance companies to do their due diligence to ensure that they know who they are insuring so that there is little room for argument later on as to whether a claim should be approved.

Protect your claim and your rights under the law

Despite the current state of Oklahoma’s law on these matters, the truth remains that insurance companies break the law all the time, including by engaging in post-claim underwriting. But given the enormous costs of long-term care today, you can’t afford to let an insurance company take advantage of you and your loved one. That’s why if you think that your insurance company is cheating you, then you should consider discussing your situation with an attorney who is experienced in handling these types of insurance cases.