Unexpected and dangerous threats in the form of professional and personal liability have emerged in the wake of the growing LTC funding crisis. Lawsuits and mandated claw-back actions have been brought against families in attempts to recover monies spent on long term care. Insurance and legal advisors have also been sued by clients in response to fiduciary responsibility issues about options to fund long term care, or how to derive the highest value from a life insurance policy.
Laws to recover LTC expenditures
Legal risks and exposure
No sooner said than done…
By 2014, twelve states had introduced policy conversion consumer disclosure legislation to educate policy owners about the option to sell a life insurance policy to fund a long term care benefit plan and remain private pay. It also codifies the long term care benefit plan structure that protects the funds and ensures they will only be used to pay for long term care services in: California, Florida, Kentucky, Louisiana, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Texas, and Washington. Texas was the first to enact this consumer protection legislation into law in 2013, followed by Kentucky in 2014.