Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 9, 2020

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Two insurers have agreed to settle a class action lawsuit that alleged bad faith insurance practices over their long term care insurance policies. Hundreds of Missourians had sued the insurance companies for raising their premiums on long term care insurance without notice, but over 1,600 will benefit.

1,600 Missourians Affected

Although hundreds of Missourians participated in the class action, it is believed that over 1,600 Missourians will benefit from the settlement. The insurance companies, American Heritage Life Insurance and Mutual of Omaha Insurance, along with insurance agent Wakely & Associates, were defendants in a class action lawsuit which alleged that their long-term care insurance premiums were initially set very low, but were later intentionally and substantially raised without notice to policyholders.

The parties settled the class action for $15 million – $11 million from American Heritage Insurance and Mutual of Omaha will go towards insurance and benefits and $4 million from Wakely & Associates will be paid in cash. While none of the defendants admitted any wrongdoing, many believe that their actions amount to bad faith insurance practices.

Bad faith insurance practices

Insurance companies owe a duty of good faith and fair dealing to their policyholders. However, they often breach that duty by denying claims, delaying claim payments and not being honest about their practices. Long term care insurers, in particular, have a reputation for treating policyholders unfairly.

When long term insurance policies were first written twenty or so years ago, insurers pushed these types of policies hard, telling policyholders that it would provide them with coverage if they ever needed to go into a nursing home, assisted living facility or needed in-home health care. What insurers didn’t know at the time was how much health care costs would increase. Now, paying long term care claims has become a financial burden and many of those insurers do whatever they can to simply avoid paying those claims.

If your insurer has denied or unreasonably delayed your valid long term care benefits, contact an experienced long term care insurance attorney to discuss your situation and evaluate your options. Insurance companies cover risks in exchange for premiums. Just because they may have miscalculated a risk, that doesn’t mean they can simply walk away from their responsibilities.