The Long Run...

The New York Times has a disturbing piece on the travails of those who've purchased Long Term Care insurance (LTCi), especially from Conseco. It's a look at the "dark underbelly" of the biz, and it's not flattering.

It's not necessarily all that helpful, either.

It starts with the sad story of Mary Rose Derks, a 65 year old widow who bought such a plan some 17 years ago. Over the years, she (and her family) have spent tens of thousands of dollars on premiums, only to have claim after claim denied. On the face of it, this is unconscionable, but perhaps there's more to the story than what the Gray Lady has deigned to share with us.

For one thing, Conseco has long had an industry reputation as, um, problematic. They got into this line with obviously underpriced products, and have had numerous rate increases over the years as a result. Contrast that with industry leaders like UNUM, Hancock and Genworth, all of which have relatively quiet rate histories, and substantially fewer claims issues.

What's the difference?

It goes unremarked in the NYT article, but there's one entity which fails to make an appearance in all 3,000 words: where's the agent?

This is an important, if egregious, omission for a number of reasons. First and foremost, the agent is the first-line defense against unscrupulous claims practices. How so? Simple: we're advocates for the insured. Independent agents, especially, fulfill that role, because we work for the client (we represent the carrier - a vast difference). It's our job to make sure that the carriers we represent have solid reputations (and yes, that's not a fool-proof guarantee against problems, but it's certainly insurance against them), and to dissuade our clients from looking at price alone.

That, by the way, is the most likely culprit here: again, the Newspaper of Record fails to enlighten us, but it's a sure bet that many (most?) of these folks bought on (low) price alone. That doesn't, of course, absolve the carriers from their responsibility, but it certainly must be a factor.

No doubt some of our commenters will take me to task for all the assumptions I've made here. To which I offer the following affirmative defense: if the NYT had done the full job, and not left so many critical questions unanswered, we'd know for sure, wouldn't we?

UPDATE: Eric Turkewitz has a slightly different take over at New York Personal Injury Law Blog.