Recently a few items of interest crossed my computer screen and I thought it would be good to share with you some news from the world of life and health insurance. As they say, knowledge is power, and being a knowledgeable consumer of insurance is always a good thing. So here are a few bits of news with a sprinkle of my comments mixed-in.
Let's begin with some troubling news from North Carolina. The insurance commissioner there, Mike Causey, has levied a penalty of $1.1 million on Gerber Life for claims processing violations and delays. The company is also paying $2.5 million in additional recoveries and interest to claimants.
The insurance commissioner's office examined around 300 claims from over seven years, and they found a lot of violations with Gerber Life's accidental death and dismemberment policies. According to US News and World Report, "Biological parents were initially denied benefits for children and had to send in clothing receipts and other unnecessary documentation to prove a parent-child relationship."
Also, the claimants had to sue to get their benefits and the company didn't pay for any of the attorneys' fees, nor did they pay interest on untimely paid claims.
My thoughts on this are as follows: This is the kind of thing that makes my job harder than it already is. Mistrust grows from news of a company not wanting to or dragging their feet when it comes to paying claims. I'm glad that the insurance commissioner's office was able to find this problem and fix it, but that's just one insurance commission out of fifty. Are we to assume that Gerber Life only dragged their feet paying claims in North Carolina?
In other news, one of our carriers, Guaranteed Trust Life, is changing the age eligibility requirements for their Short Term Home Health Care plan. Beginning September 3, 2020, the minimum age will be raised to age 61. The rest of the policy will remain the same with benefits like a prescription card and access to their "Ask Mayo Clinic" symptom assessment tool.
From my perspective, I love this policy, but I wish they didn't raise the age. Statistically, about a third of people who are chronically ill are under the age of 65. As many people in their 40's and 50's see their parents need care and realize how expensive it can be, these people begin looking into their options for Long Term Care and Short Term Care products. I like to call these folks "forward looking" and hate seeing their choices for good plans decrease.
My gut tells me that the Covid-19 pandemic has affected the number of claims filed, but I'm not completely sure.
The Guaranteed Trust Life product is priced so affordably that I had many people who were not yet 60 years old interested. The good news is that the carrier offers a full line of other ancillary products such as cancer and critical illness plans that are still available to many people of all ages.
One other bit of related news is that Covid-19 is impacting pricing and benefit options for those considering long term care insurance, according to the American Association for Long Term Care Insurance (AALTCI).
According to AALTCI director Jesse Slome, "Insurance companies are raising rates for new applicants, they are changing benefit options and in certain states limiting the ages of applicants."
With over 40,000 deaths in nursing homes attributed to the virus, it's easy to see why the insurance carriers are concerned. These facilities are overwhelmed and, as a result of the virus, also understaffed.
As you can see, we at Surf Financial Brokers try our best to stay on top of the news in our industry. Look us up on the web and feel free to comment below.
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!