Will Allianz pay claim after mom in hospice care takes a turn for the worse?

By | September 29th, 2016

Mary Rosenthal’s mother has been in “slow decline” for years. But when there was a period in which her health seemed to be stabilizing, Rosenthal thought she could get away for a vacation.

Then her mother’s health took a turn for the worse and Rosenthal had to cancel her trip. Now her travel insurance company is stonewalling her on her claim for reimbursement of her airfares.

Rosenthal had booked a trip to Ireland by way of Boston, where she planned to meet a friend, and insured the Boston portion of the trip through TravelGuard, a division of AIG. She took out a policy from Allianz to cover the remainder of the trip to Ireland.

But several weeks before the trip, Rosenthal’s mother, who is in hospice care, took what Rosenthal terms a “precipitous downward turn.” Her doctor informed Rosenthal that “it might be a good idea to cancel the trip.”

Rosenthal canceled her trip on the doctor’s recommendation, filing claims with TravelGuard and Allianz. She sent in her paperwork, including medical forms and physicians’ reports, to both insurance companies. TravelGuard promptly issued her a reimbursement for her airfare to Boston.

Allianz, on the other hand, has requested more and more documentation to determine the extent to which Rosenthal’s mother’s health condition was pre-existing.

It is standard practice for insurance companies to inquire about pre-existing conditions when a policyholder files a claim, so it’s not surprising that Allianz is asking for further documentation about Rosenthal’s mother’s medical condition. And unfortunately, requesting increasing amounts of documentation from the insured is a common tactic used by insurance companies to delay paying claims — as is denying them altogether based on pre-existing conditions.

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But when do demands for documentation by insurance companies cross the line between reasonable claims adjustment behavior and unreasonable stonewalling and delays?

Rosenthal asks, “I learned trip cancellation due to aging family members’ illnesses is becoming more common and that TravelGuard is the only company that will insure in these cases. Is this, in fact, true? How could I have planned this trip and purchased travel insurance differently?”

It could be argued that Rosenthal should have insured her entire trip through TravelGuard, but even TravelGuard policyholders have had problems collecting on their claims, as we’ve recently reported. Or she might have tried to purchase insurance from other carriers, including those listed in the company contacts section of our website.

Rosenthal might have purchased “Cancel Anytime” travel insurance through Access America, the consumer travel insurance brand of Mondial Assistance, which is part of the Allianz Group.

According to Allianz’s website, “Cancel Anytime offers 80 percent cash-back, for virtually any reason, anytime a policyholder cancels their cruise or tour for an unforeseen reason. On average, this plan will cost ten percent of the client’s total trip cost.”

But Rosenthal’s case is not an easy one to advocate. On the one hand, Rosenthal’s mother has been in hospice care for over a year, so Allianz could have a valid claim that her condition was pre-existing at the time Rosenthal purchased her policy. And in any case, a pre-existing conditions waiver, if Rosenthal had it, would apply to pre-existing conditions Rosenthal herself had, and not her mother.

Apparently, Rosenthal did not have coverage of the “cancel-for-any-reason” variety, which would have paid her claim without an inquiry into whether her mother’s condition was pre-existing.

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But on the other hand, denying claims on the grounds of pre-existing conditions has the end result of preventing anyone who was unfortunate enough to be sick, or to have sick relatives, from ever collecting on claims that are otherwise valid, forcing them to absorb large financial losses that the insurance was supposed to protect them against in the first place.

Are insured people who have been sick but are currently well, might become sick or who have sick relatives never supposed to travel so that insurance companies don’t have to pay their claims?

When reading denial letters from insurance companies, it seems that the answer is “Yes.”

Unfortunately, all we consumer advocates can do is warn travelers to read travel insurance policies carefully to ensure that the policies meet their coverage needs — and that even travel insurance doesn’t always help.

Should Allianz pay Mary Rosenthal’s claim?

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Update (9/30): Allianz has responded to this post:

I asked our Claims Department to look into it, they reviewed the documentation and they said they have sufficient information to pay the claim. The Rosenthals should receive a check in 7 to 10 days and we’re sorry for their inconvenience and wish them the best.


(10/15): We have since learned from Mary Rosenthal that she has received the reimbursement check from Allianz.

  • Chris_In_NC

    Based on the information provided I side with Allianz on this claim. Her mother is already in Hospice care. This speaks to the seriousness of her medical condition. No underwriter would sign off on a policy to cover medical cancellation under these circumstances. Not to be cold, but this is a failure of the OP to understand the insurance policy and unrealistic expectations.

  • AAGK

    This is tricky. Rosenthal isn’t cancelling for her own health issues where preexisting status may be relevant, but based on a decision to be present for her mother. If this is a covered reason then the mother’s preexisting health should not necessarily be relevant and the policy may be unclear in that regard. She may be better off pleading directly with the airlines and hotels as they usually make more goodwill exceptions than insurance companies.

  • James

    Time for travel insurance insurance.

  • AAGK

    It’s not a medical cancellation though. I’m not sure which provision she used, but it was probably something like an immediate family member got sick. There may not be a preexisting requirement in the policy for that circumstance. If there is, she is out of luck.

  • sirwired

    It all comes down to what you are willing to pay in premiums. Allowing coverage for pre-existing conditions is not without cost; it opens up insurers to the infamous problem of “Adverse Selection”, meaning those most likely to file claims are the most likely to obtain coverage.

    All the carriers take measures to prevent this; some, like TravelGuard, offer a pre-ex waiver, but they place requirements on the timing of the policy purchase, and how much you must insure. Others simply offer no such waiver. (Some providers, TravelEx is one, do not apply the pre-ex exclusion to non-travelers… that’s a pretty good deal if you have elderly relatives and don’t otherwise qualify for a policy with a pre-ex waiver.)

    Whatever the solution, the more protection offered, the more it costs. No Free Lunch.

    All this is made pretty clear in the policy documents everybody is sent when taking out the policy; they are not particularly long, and are not written in legalese, and every insurer out there offers a full refund within seven days if you don’t like what you see.

    (On another note, as far as CFAR riders go, 80% is pretty generous; if I had a relative in hospice, and had a policy with a pre-ex exclusion I’d totally be taking that option!)

  • Harvey-6-3.5

    First, my condolences to the OP. As I understand hospice, patients are not expected to live more than 6 months (though I know that some, like Andy Rooney, I think, exceed that). Therefore, if a person has a close relative in hospice, perhaps travel should either be avoided or the person must recognize that time and life moves on and the relative may pass while they are away. It is a sad, but unfortunate reality.

  • Michael__K

    Precisely which provision in the insurance policy are you so sure she failed to understand?

    Allianz hasn’t even denied her claim yet — but you are certain they can and should?

    We don’t know if she bought her policy directly from Allianz and within the Pre-Existing Condition Exclusion Waiver deadline.

    And either way, depending on the precise facts, there could be contractual grounds to deny the claim or there could not be. Or it could depend on highly subjective interpretations.

  • Michael__K

    Before we even talk about Pre-Existing Conditions, did she purchase the insurance directly from Allianz within 14 days of her initial deposit? If so, she should have a Waiver for pre-existing conditions.

  • Michael__K

    Allianz offers a pre-ex waiver within 14 days just like TravelGuard does. So what’s the legitimate reason for TravelGuard to accept and pay the claim swiftly while Allianz drags it on for months with documentation requests?

    And if “it all comes down to what you are willing to pay in premiums”, why isn’t the price the same after the pre-ex waiver deadline, and why are Travelex policies priced about the same as many other companies?

    And how would one quote the price for this 80% CFAR rider and purchase it? I found a press-release stating it is available in Washington State as of last month, but if I visit Allianz’s website I do not see any option to purchase it, even if I select Washington as my home state,

  • Regina Litman

    At least the heartless “No” votes are trailing the compassionate “Yes, OF COURSE” votes today, unlike yesterday. But the lead should be larger.

  • Michael__K

    According to Allianz’s website, “Cancel Anytime offers 80 percent cash-back, for virtually any reason, anytime a policyholder cancels their cruise or tour for an unforeseen reason. On average, this plan will cost ten percent of the client’s total trip cost.”

    That refers to a press release is from 2008.

    There is no mention of this and no option offered to purchase this on Allianz’s website today.

  • sirwired

    I can’t answer why Allianz won’t pay while TG does. I can guess it has to do with the fact that their trip was split up amongst carriers. Both Allianz and TG both require you insure the whole trip with them for the pre-ex waiver to be valid. Maybe TG didn’t notice? I dunno…

    Why isn’t the price the same after the pre-ex waiver deadline? I guess they want only one price for a particular plan; that’s a reasonable business decision to make. Any why is Travelex pricing similar? You’d have to ask their actuaries.

  • Michael__K

    Allianz defines a “Trip” as “Round-trip or one-way travel to and from a place at least 100 miles from your home.“, so I don’t think it should matter if she insured immediately prior or subsequent travel separately as long as there is no overlap.

    That the prices don’t change are clues that the issue is not really about what people are willing to pay in premiums. I don’t believe any insurer offers pre-existing condition waivers at all times at any premium. I do agree that these waiver deadlines are part of their strategy to counter the “Adverse Selection” issue.

    That Travelex’s prices are competitive suggests that there isn’t much Adverse Selection occurring with respect to travelers’ sick family members.

  • Rebecca

    “…denying claims on the grounds of pre-existing conditions has the end result of preventing anyone who was unfortunate enough to be sick, or to have sick relatives, from ever collecting on claims that are otherwise valid, forcing them to absorb large financial losses that the insurance was supposed to protect them against in the first place.”

    This statement is ridiculous. Travel insurance is meant to cover unforeseen circumstances. It really isn’t meant for people to book a vacation, hoping that they’ll be able to travel when there is a significant chance that they will not. Certainly, that isn’t a sustainable business model. They’d pay out too many claims to be profitable. As others have pointed out, cancel for any reason coverage recoups (normally) 80% of the cost, not all, and is more expensive in the first place.

    I just can’t understand why a business should be expected to set up a system to lose money. In the name of “sympathy”. I find that ridiculous, and shaming them to also be ridiculous.

  • Barthel

    If an insurance company refuses to pay, file a complaint with your state department of insurance. This has brought me a satisfactory solution several times.

  • Chris_In_NC

    I sympathize with the OP, I really do. It is difficult to have a family member under hospice care. You’re right, we don’t know the exact terms and conditions of the insurance policy. I have no idea why Travelguard paid and Allianz is dragging its feet. (It may be due to amount insured ie Travelguard was only for plane ticket to Boston whereas Allianz is on the hook for a much larger amount)

    But as @disqus_eRRiqftGfu:disqus says, “Travel insurance is meant to cover unforeseen circumstances.” A hospice patient who worsens is not a situation that a reasonable person would view as being unforeseen. It is the reason why insurance policies have underwriting, exclusions and pre-existing clauses.

    Fine, that doesn’t answer the question as to whether Allianz is legally required to pay. But, I’m not very sympathetic to the OP on this one.

  • Michael__K

    I agree that travel insurance is for unforeseen circumstances and that most hospice patients pass away within weeks, which would not qualify.

    However there are some patients who spend years in a hospice. Mary Rosenthal’s mother was already in hospice care for over a year. If a doctor advised that she was stabilizing and that she was expected to remain in hospice care for many more months (if not years), than her “precipitous downward turn” may truly have been “unforeseen.”

    [BTW, ironically, it’s TravelGuard, but not Allianz, which specifically states in their contract that covered events must be “Unforeseen”, which they define as “not anticipated or expected and occurring after the effective date of coverage.” ]

  • cscasi

    Allianz travel insurance policy coverage states for a “existing medical condition:
    Your plan may provide Existing Medical Condition Coverage if you, a traveling companion, or family member has an Existing Medical Condition. An Existing Medical Condition is an illness of injury that exhibited symptoms or was treated at any time 120 days prior to purchasing your plan. Coverage for an Existing Medical Condition is excluded unless: 1.) You purchased your plan within 14 days of making your first trip payment or first trip deposit; 2.) You purchased Trip Cancellation coverage that covers the full cost of all your non-refundable trip arrangements; 3.) You were a U.S. resident and medically able to travel on the day your purchased the plan; 4.) The total cost of your trip does not exceed the maximum cost specified by your plan. All other contract terms and conditions apply.”

    Seems to me that her mother fits into the scope of the above “existing medical condition”. The question “may” be the timing. It’s obvious that her mother has an existing medical condition and that she was being treated for it (being and still in hospice) at any time 120 days prior to purchasing your plan. Did Ms. Rosenthal meet the other listed conditions?

    Truth is that “we” do not know why Allianz requested the additional information it did. Did Ms. Rosenthal call and ask why? That might have given us a clearer picture of the situation so we could give better thoughts/ideas of whether she was covered or not.

    Lacking that all we can do is provide conjecture and then wait for the response from Allianz to Ms Rosenthal (which I hope Ms Rosenthal will provide to Chris so we can all know). Then, we might be able to debate whether the outcome was fair or not.

  • Lindabator

    actually, had she insured with TravelGuard or TravelEx, both allow a policy purchased with 14 days to have a waiver of pre-ex for traveller AND members of their immediate family, whose illness may cause the cancellation – not sure why she did not use them for the entire package?

  • Lindabator

    if she had pr-ex waiver, it DOES cover this instance (had clients have to use in the past)

  • Lindabator

    correct! and those pre-ex conditions cover family members causing you to cancel (have used for a client in the past) – just need to know what her coverage included before we can judge here

  • Lindabator

    no – time for people to purchase correct insurance — her TG policy already paid, because she obviously had the correct coverage on her air tickets – she should have just covered all under TG and she would be whole already

  • Lindabator

    true – we really need to know WHICH policy she purchased with Allianz, and whether with or without pre-ex waiver.

  • Lindabator

    but if she only insured the flights with TG, she can only CLAIM the flights with TG, which she did – which is why they paid. Had she asked for the entire trip, then they would not have paid.

  • Lindabator

    It is not heartless if a company covers only what they specify. In this case, if she did not have the right coverage, they would not pay – that’s like expecting your home owner’s to cover your million dollar art collection, but you never purchased a rider for that coverage — just because a COMPANY has deep pockets, does not mean they MUST be generous each time. The problem with this case, is she seems miffed that she has to give them paperwork for the claim, and we do not have any info she had a pre-ex waiver in place

  • Lindabator

    or send them the paperwork they are requesting before bellyaching you don’t have a resolution

  • Michael__K

    I don’t understand your complaint here. What makes you think Allianz (or TravelGuard) has set up a system to lose money? What makes you think their contracts don’t already adequately protect them from claims that were foreseen and expected in advance?

    And if somehow they missed anything, there’s a very simple remedy: they have the ability to revise their contracts going forward at their whim.

    When a consumer gets tripped up by a harsh, even unfair, policy, we see lots of unsympathetic dismissive comments that they should have read the contract more closely. So what about the authors of the contract — who could have revised it anytime? Why aren’t they responsible for reading it and abiding by it?

    In this case, I think it’s very interesting and helpful to compare how these two insurers handled a claim for the exact same scenario. Neither company has a flawless record on this site, but the contrast reported here is consistent with the general pattern observed from prior articles and forum complaints over several years…

    BTW, I don’t believe Allianz sells CFAR at all these days, let alone 80%. The press release linked from the article is from 2008. Most companies will go no higher than 75%. And it’s effectively closer to two-thirds when you factor the additional cost for this.

  • Michael Anthony

    Hospice care is for people who are considered to have less than 6 months to live. HOW EVER, this can change as people can rally and get better. People have to get recertification to remain in hospice. Or, they leave hospice and can return at anytime. Medicare allows this, thus insurance companies also know that hospice does not always equal pending or immediate death.

  • Pickwix

    I’m glad that this case has been put online. It reinforces my belief that Christopher is a “straight shooter”, since Allianz is one of Chris’ major underwriters. Well done.

  • Daddydo

    What a discussion! I am not sure why anybody would want to purchase to separate policies to begin with. The claim is being paid, but the question has never been answered. Travel Guard has a pre-existing clause that is in black and white. It has no exclusions that I have ever seen. If you purchase Travel Guard Gold insurance within 14 days of the initial deposit, all pre-existing conditions are waived. Simple. We dropped Alliance as that clause did not exist.
    Hospice. They are there to comfort the family and the patient. They are there to make the last days / months, whatever length of time it takes, of life comfortable for the family and especially the patient. They are not there to prolong life. Once we contracted with Hospice, we knew that Mom’s life circle was coming to an end, so I was never going to consider leaving for anywhere. I think that Hospice is the single reason that we got through Mom’s passing with ease. Thank you WV Hospice care.

  • Michael Anthony

    Yes, hospice patients have to be certified they have less than 6 months to live. BUT, people’s conditions change, and they can go in and out of hospice for years. They just have to be discharged from hospice and if condition declines, they recertify and re-enter hospice. All insurance companies and Medicare practice this. One would think travel insurance would follow the industry standard. My mother in law has been in and out of hospice for 2 years now. We don’t spend tens of thousands to go on trips, but when she’s out of hospice, there’s no reason not to travel. One would think because this is the industry standard, you’d have a good case in court. Even if a person is in hospice, they can be stable and would be no different than you traveling with a family member in hospital for routine surgery. Yes, death is an inexact science, but when in hospice, many patients are stable and not actively dying during their entire stay, unless they were transferred in that condition. And yes, hospitals will do that to “open” a bed.

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