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Unum Bails on Providing Long-term Care Insurance

October 8, 2012

Once again, Unum has walked away from its policyholders when they needed help the most.

Unum is among five U.S. insurers either exiting the long-term care industry or heavily scaling back involvement in it, Moody’s Investors’ Service reported last month. The companies—which also include MetLife, Guardian Life, John Hancock and Prudential Financial—have claimed they simply aren’t making enough money on providing the insurance that covers the nation’s oldest and most vulnerable citizens. Unum began to step back from the long-term care market earlier this year.

According to the Department of Health and Human Services, 70% of Americans over 65 will need long-term care at some point in their elderly years. More than 40% will need care in a nursing home. Long-term care insurance helps pay for these nursing homes, as well as home care and extended hospital stays, among other things.

The Change Comes At a Time of Need

At the same time these insurance giants cite a lack of profitability in offering long-term care insurance, premiums for such care are quickly on the rise. One Illinois couple saw their bill for long-term insurance nearly double to more than $7,000 annually.

While cutting back on insurance coverage is seen by some Americans as a way to trim their expenses, Forbes recently recommended that it’s not worth the risk if you have a family history of illnesses such as Alzheimer’s disease, stroke, multiple sclerosis or any other ailment that has the potential to require long-term care.

But that doesn’t mean insurance to cover it is affordable or easy to find. And, by taking a step back from the market, companies like Unum aren’t helping Americans looking to invest now so their medical expenses in the future will be covered.

Unum Has Failed Those in Need Before

Unum attracted widespread controversy—and has been the target of lawsuits—for adopting the despicable business model of providing incentives to employees who deny valid claims for coverage by policyholders. This practice, which dated back several years, was confirmed by a multi-state investigation in 2004. Unum’s misdeeds left some policyholders in financial ruin after they had to foot the bill for costs their insurer should have covered. The company agreed to pay millions of dollars in fines and reconsider some 200,000 denied claims as a result.

Unum remains a successful corporation, posting 2011 revenues of $10.3 billion. So why can’t they be there for elderly Americans willing to pay the company for the insurance they will need later in life? Haven’t our seniors earned the right to invest in future medical care so they don’t spend their final years beneath a pile of medical bills?

Contact our attorneys if you or someone you know has been a victim of a scam by Unum like the one uncovered in 2004. And share this blog with people you know so they learn how insurance giants are making it harder for them to plan for their final years.

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