Showing posts with label long term care insurance. Show all posts
Showing posts with label long term care insurance. Show all posts

Friday, May 10, 2019

Washington State May Be First Sate With Payroll-Funded Long Term Care Insurance Benefit.

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Numerous states are considering proposals to create a long-term care insurance programs, many funded by a payroll tax. Washington may be the first to actually enact a plan. Both the Washington State House and Senate have passed legislation, so all that’s required is a House re-vote on a Senate package that differs slightly from the House version. 

The Senate tweaked a few aspects of a proposal passed earlier by the House, so approval appears all but assured. The governor, provider associations and many others have  supported the measure, which would cap the lifetime benefit maximum at $36,500 per person. The governor has promised to sign the bill when presented. 

MyNorthwest reported in an article the sponsor's statements supporting the legislation:

"Democratic State Rep. Laurie Jinkins has introduced the Long Term Care Trust Act, which she says would work similarly to unemployment.  'What we do is create, essentially an insurance program where folks pay a premium of 0.58 of a percent, so 58 cents of every hundred dollars they earn would go into the trust. In return, any time they needed long-term care they’d be able to draw on that,' Jinkins explained. 
Workers of all ages would pay into the program, at a cost of around $24 a month for someone earning $50,000 a year.

That creates a benefit of roughly $37,000 over a person’s lifetime they could take in units of $100.
“That amount of money, for example, would pay for 25 hours a week of in-home care over the course of a year, respite care for one of your family members who was getting care; it would pay for that for maybe five years. So, it’s a pretty significant benefit for people,” Jinkins said.
Providers could start collecting payment from the program beginning in January 2025. The measure covers traditional long-term care services for people needing help with at least three activities of daily living (ADLs), as well as things like in-home care and meal delivery, rides to the doctor, home modifications such as wheelchair ramps, and reimbursements to unpaid family caregivers.  Washington defines more broadly ADLs than does private insurance, which usually triggers benefits when someone requires help with two ADLs. The state would reimburse providers directly. Family caregivers could be paid, though they first would have to go through a training program. 

Premiums of 0.58% of wages would begin being withheld from employees’ checks starting in 2022. Someone earning $50,000 per year would pay a premium of about $24 per month, or $288 per year. Under the Senate version, individuals holding long-term care insurance policies would be exempt.

A participant must work and pay the premium/payroll tax for at least 10 years, with at least five uninterrupted, or three of the last six years. Thus, most current retirees would be ineligible for the program.  

Provider and consumer groups testified in favor of The Long Term Care Trust Act, and nobody testified against it, at a House Health & Wellness Committee hearing in January. Experts say 60 percent of us will need long-term care or support of some sort after we hit 65.

In a House committee hearing,  Dan Murphy, executive director of the Northwest Regional Council explained who the insurance would benefit:
“People need long-term care when they can no longer do basic things themselves. Things like bathing, dressing, getting out of a chair, a bed getting into a car, managing their medications or just even standing, walking around. That’s what we’re really talking about in the assistance lift, when folks can’t any longer do things for themselves.”
An outside study authorized by the Legislature back in 2015 found there is a significant need, with seven of 10 people over 65 years old expected to need this type of care.

Of course the program also benefits the State of Washington.  An outside study found the program would lead to big savings for Medicaid over time, close to $900 million in the 2051-53 biennium.

According to an article in Forbes, although Washington is the first state in the US to enact a public long-term care insurance program other states are considering similar legislation.  "Hawaii has provided a public cash benefit for family caregivers of frail older adults, though it is not really an insurance program. California is considering a ballot initiative on a public long-term care financing program, Michigan and Illinois are studying public programs for those not on Medicaid, and Minnesota has proposed two alternative private financing options for long-term care."  Forbes notes,  though, that the "idea is not universally popular, however. Last year, Maine voters rejected a public plan to help fund home care."

According to ForbesWashington State is choosing a "front-end insurance model that could begin to cover benefits as soon as participants have a need. It would cover the most people, though its benefit would pay only a small fraction of the costs for someone who needs several years of care."  An alternative model, "called a catastrophic or back-end design, would require participants to pay for the first years of care, but provide lifetime coverage after that.  It would cover fewer people than a front-end plan but would focus on those with the greatest need."

The Forbes article concludes that "[t]he Washington State model would be an important experiment, and it could create momentum for other states to adopt long-term care insurance programs."

Thursday, September 27, 2018

Most Affluent Seniors Want to Age In Place Including Relying on and Compensating Family For Long Term Care

McKnight's Long Term Care News, reports the results of a new survey of wealthy seniors which suggests that many of nursing homes’ potential residents would prefer to receive long-term care at home, and would be willing to pay their own family members for it.

The Harris Poll, conducted on behalf of the Nationwide Retirement Institute, conducted a survey that gathered responses of more than 1,000 U.S. adults, age 50 or older, with an annual household income of $150,000 or more.  The survey found that about seventy-one percent (71%) of seniors would prefer to rely on a family member for long-term care. More, seventy percent (70%) of those surveyed would not expect that help, unless they were able to pay relatives.

Only one percent (1%) stated that they preferred to receive skilled care in a nursing home. The majority of respondents (56%) said that they “would rather die” than live in a nursing home, and just less than half of the respondents (47%) said they worry about becoming a burden to their families.  Reasons for those worries included loss of control of their lives (68%), detachment from the community (32%) and seeing family less often (30%).

The overwhelming majority of respondents (77%) said, if needed, they’d most prefer to receive long-term care at home.  

More details from the seventh annual survey can be found on Nationwide’s website here.

Monday, September 3, 2018

Must-Know Statistics About Long-Term Care

Christine Benz, Morningstar's director of personal finance, has penned an excellent article regarding long term care.  In it, she collects the most fascinating array of statistics regarding long-term care, caregiving, and the financial consequences of both.  

Ms. Benz describes the issue of what to do about long term casts later in life as the "single unsolved problem in the retirement plans for many middle- and upper-middle-income adults."  

She warns against the wealthy being too cavalier about their ability to pay the cost of long-term care: 
"[v]ery high-income, high-net-worth people can plan to self-fund long-term care costs, though I'd advise them to do the math on long-term care cost inflation before getting too comfy with the idea that they'll have enough to do so. 
Meanwhile, she warns that most people without significant financial assets will need to rely on Medicaid-provided long-term care; Medicaid and other government programs cover the majority of the long-term care costs in the U.S.

For those in the middle, she describes the choices as "stark and rather unappealing:" 
Sandwiched in the middle are people with some, even significant, financial assets--just not necessarily enough to comfortably fund a $300,000 (or more) long-term care outlay at the end of their lives. For them, the choices are stark and rather unappealing. They could purchase traditional long-term care insurance and risk premium hikes. Alternatively, they could purchase one of the increasingly popular hybrid life/long-term care products and face an opportunity cost, as discussed here. Or they could forego insurance altogether, planning to self-fund care or use nonportfolio assets, such as a home sale, to cover any long-term care costs.
Add to these unappealing choices the surprises that often await long-term care recipients, including, but not limited to state resource recovery laws and filial responsibility- and the choices are worse than "stark;" they are potentially devastating.  

Every year, Ms. Benz compiles facts and figures regarding long-term care in an effort to aid in decision making and planning.  These statistics follow organized by subject matter.  
Usage of Long-Term Care
  • 52%: Percentage of people turning age 65 who will need some type of long-term care services in their lifetimes. 
  • 47%: Estimated percentage of men 65 and older who will need long-term care during their lifetimes.
  • 58%: Estimated percentage of women 65 and older who will need long-term care during their lifetimes.
  • 2.5 years: Average number of years women will need long-term care.
  • 1.5 years: Average number of years men will need long-term care.
  • 14%: Percentage of people who will need long-term care for longer than five years.
  • 10%: Percentage of Americans over age 65 who have Alzheimer's dementia. 
  • 33%: Percentage of Americans over age 85 who have Alzheimer's dementia. 
  • 64%: Percentage of Americans with Alzheimer's dementia who are women.
  • 123%: Percentage increase in the number of people who died from Alzheimer's dementia, 2000-2015.
  • -11%: Percentage decrease in the number of people who died from heart disease, 2000-2015.
  • 22%: Percentage of individuals over 65 in the highest income quintile who will have a long-term care need of two years or longer.
  • 31%: Percentage of individuals over 65 in the lowest income quintile who will have a long-term care need of two years or longer.
  • 45%: Percentage of people requiring significant long-term care help (assistance with two or more activities of daily living) who are under age 65.
  • 8%: Percentage of people between the ages of 40 and 50 who will have a disability that will require long-term care services.

Paying for Care
  • $30 billion: Long-term care expenditures in the U.S., 2000.
  • $225 billion: Long-term care expenditures in the U.S., 2015.
  • 57.5%: Percentage of individuals turning 65 between 2015 and 2019 who will spend less than $25,000 on long-term care during their lifetimes.
  • 15.2%: Percentage of individuals turning 65 between 2015 and 2019 who will spend more than $250,000 on long-term care during their lifetimes.
  • $341,840: Estimated lifetime cost of care for someone with dementia. 
  • $18,200: Median annual cost for adult day care (five days/week), 2017.
  • $45,000: Median annual cost for assisted-living facility, 2017.
  • $85,775: Median annual nursing-home cost, semiprivate room, 2017.
  • $97,455: Median annual nursing-home cost, private room, 2017.
  • $215,770: Average annual nursing-home cost, private room, Manhattan, 2017.
  • $51,100: Average annual nursing-home cost, private room, Monroe, Louisiana, 2017.
  • $23,394: Median annual income from all sources for individuals who are 65 or older.
  • $39,823: Median annual income for households headed by people 65 or older.
  • 3.8%: Five-year annual inflation rate in nursing-home costs, private room, 2017.
  • 5.5%: One-year annual inflation rate in nursing home costs, private room, 2017.
  • 19%: Percentage of long-term care costs that were paid out of pocket, 2013.
  • 8%: Percentage of long-term care costs that were paid by private insurance, 2013. 
  • $263,200: Median household wealth for adults age 65 or older with no disabilities. 
  • $94,200: Median household wealth for adults age 65 or older with limitations on two or more activities of daily living. 
Caregiving 
  • 34.2 million: The number of Americans who have provided unpaid care to an adult 50 or over in the past 12 months.
  • 16.1 million: The number of caregivers for someone with Alzheimer's or other dementia. 
  • $470 billion: The estimated dollar value of long-term care provided by unpaid caregivers, 2013. 
  • 65%: The percentage of caregivers who are female.
  • 33%: Approximate percentage of caregivers to people with Alzheimer's/other dementias who are daughters.
  • 25%: Approximate percentage of caregivers who are "sandwich generation" caregivers, providing care to children as well as older adults. 
  • 34%: The percentage of caregivers who are age 65 or older.
  • 33%: The percentage of people providing care to people age 65 or older who describe their own health as fair or poor. 
  • 83%: Percentage of care provided to older adults that is delivered by friends or family members. 
  • 65%: The percentage of older adults with long-term care needs who rely exclusively on friends and family members to provide that assistance.
  • 34.7: Average number of hours worked by unpaid caregivers who have jobs in addition to caregiving. 
  • 70%: The percentage of caregivers who suffered work-related difficulties due to their caregiving duties.
  • 36%: The average percentage of caregivers for people age 50 or older who said they were experiencing high levels of financial strain.
  • 10%: The estimated percentage of older adults who have suffered from some form of elder abuse. 
  • 7%: The estimated percentage of elder-abuse cases that are reported to authorities.
State and Federal Funding 
  • 51%: Percentage of long-term care services and supports that were provided through Medicaid, 2013.
  • 20%:  Percentage of long-term care services and supports that were provided through other public sources, 2013.
  • 62%: Percentage of nursing home residents whose care is provided by Medicaid. 
  • 20%: Percentage of Medicaid funding that went to pay long-term care costs in 2016. 
  • 50%: Expected increase in Medicaid spending for long-term care between 2016 and 2026.
  • $123,600: Maximum amount of assets that a healthy spouse can retain for the other spouse to be eligible for long-term care benefits provided by Medicaid, 2018. (Actual amounts vary by state.) 
  • $3,090: Maximum amount of monthly income that a healthy spouse can receive for the other spouse to be eligible for long-term care benefits provided by Medicaid, 2018. (Actual amounts vary by state.) 
  • 100: Days of care in a skilled nursing facility ("rehab") covered in full or in part by Medicare following a qualifying hospital stay.
Long-Term Care Insurance 
  • 125: Number of insurers offering standalone long-term care policies, 2000. 
  • Fewer than 15: Number of insurers offering standalone long-term care policies, 2014. 
  • 380,000: Number of individual long-term care insurance policies sold, 1990.
  • 129,000: Number of individual long-term care insurance policies sold, 2014. 
  • 72,736: Number of hybrid life/long-term care policies sold to individuals, 2009.
  • 305,068: Number of hybrid life/long-term care policies sold to individuals, 2013.
  • 4.5 million: Number of individuals with long-term care insurance coverage, 2000. 
  • 7.25 million: Number of individuals with long-term care insurance coverage, 2014. 
  • $1.98 trillion: Maximum potential benefit of all long-term care policies in force today.
  • $1.87 billion: Annual claims on long-term care insurance policies, 2000.
  • $9.2 billion: Annual claims on long-term care insurance policies, 2017.
  • $1,677: Average annual premium, long-term care policies being sold, 2000.
  • $2,772: Average annual premium, long-term care policies being sold, 2015.
  • 99%: Percentage of new long-term care policies that cover both nursing home and in-home care.
  • 0.5%: Percentage of all businesses offering long-term care insurance to their employees.
  • 20%: Percentage of businesses with 10 or more employees offering long-term care insurance to their employees. 
  • 13.9%: Percentage of applicants ages 50-59 denied long-term care coverage due to health issues. 
  • 44.8%: Percentage of applicants ages 70-79 denied long-term care insurance due to health issues. 

Tuesday, August 14, 2018

The Importance of a "Lapse Designee" on Long Term Care Insurance

A U.S. district court has ruled that the purchaser of a long-term care insurance policy may sue for breach of contract the insurance company that failed to notify the purchaser's son, as required in the contract, that the policy was in danger of lapsing. Waskul v. Metropolitan Life Insurance Company, (U.S. Dist. Ct., E.D. Mich., No. 17-13932, July 31, 2018).

Long term care insurance is a valuable tool in planning for long term care costs.  Policy lapse is a serious problem, though, given that an insured may experience periods of poor health or disability during which s/he may be unable to pay premiums.   If premiums are not paid timely, and the policy lapses, the financial investment in the policy is lost, and more importantly, the protection afforded by the insurance benefit is surrendered.  

Tools to prevent lapse include automatic payment, prepayment, and the appointment of a loss designee.  Automatic payment and prepayment work well to prevent policy lapse so long as funds are available and sufficient opportunity is afforded the family to recognize and fulfill the need to pay the premium.  This is uncertain, at best, especially over protracted periods of illness or disability.  A "loss designee" is an appointed person other than the insured who is notified of policy lapse, thereby helping to ensure that the premium is paid. 

Carl Waskul purchased a long-term care insurance policy from Metropolitan Life Insurance Company in 1996. The policy was guaranteed renewable, which meant that as long as Mr. Waskul paid the premiums, the company could not cancel the policy. In 2003, Mr. Waskul designated his son as "lapse designee" to receive notice if Mr. Waskul's policy was about to lapse for non-payment. In 2015, Mr. Waskul was diagnosed as cognitively impaired and failed to pay his premium in February 2016. The long-term care insurance company did not notify Mr. Waskul's son that the premium had not been paid.

When Mr. Waskul's children contacted the insurance company in 2017 for a coverage determination, they were told his policy had been cancelled. Mr. Waskul sued the insurance company for breach of contract and fraudulent misrepresentation. The insurance company filed a motion to dismiss.

The U.S. District Court for the Eastern District of Michigan, Southern Division, denied the motion to dismiss the breach of contract claim, but granted the motion to dismiss the fraudulent misrepresentation claim. The court ruled that Mr. Waskul successfully stated a claim that the insurance company did not meet its obligation under the contract "when it neglected to inform his son that [Mr. Waskul] had failed to pay his policy premium in February 2016." However, the court ruled that Mr. Waskul does not state a claim for fraudulent misrepresentation because the company did designate his son as lapse designee. According to the court, failure to follow through "does not show that [the insurance company] knowingly made the false representation that [Mr. Waskul] could appoint a lapse designee.

Although it is little consolation that an insured has a right to sue for the lapse if a policy lapses, the reality is that legal action may return to an insured and his or her family some of the investment in the policy.  Regardless, the case demonstrates why an insured should designate a lapse designee, whether or not such a designation is permitted by the terms of the policy.  Without a "lapse designee," there is no protection for the insured or the insured's family when illness or disability prevents payment of the premium. 


Friday, May 25, 2018

Dementia Depletes Life Savings

The financial and non-financial impact of dementia is undeniable, but is most tangibly recognizable in its tragic elimination of life savings. It is vital that everyone involved in planning for seniors recognize and appreciate the limits of Medicare, which only covers health care based on a diagnosis of illness or injury. The San Jose paper, the Mercury News ran an important story describing this phenomenon, aptly titled,"How dementia can drain a family’s life savings."  The subheading to the article offers this stark warning: "Medicare offers no help for the high costs of dementia caregiving."

The article explains:
”Medicare is a lifeline for seniors and the disabled, paying for “medically necessary” costs such as hospitalization, surgery, chemotherapy, transplants, medications, pacemakers and other interventions... A dementia diagnosis demands none of that. What it does require, however, is around-the-clock “custodial care,” such as help with eating and dressing, and constant supervision. That’s not covered by Medicare. And it’s extraordinarily expensive, according to a report released last month by the Alzheimer’s Association...Families’ out-of-pocket costs for a patient with dementia are 80 percent higher than the cost for someone with heart disease or cancer, according to a 2015 study in the Annals of Internal Medicine.
According to a report from the Alzheimer's Association, families can expect to spend sixty billion dollars ($60,000,000,000) caring for those with dementia!  The study apparently does NOT include those who suffer from early onset Alzheimer's.  The number of Americans living with Alzheimer's is growing — and growing fast. An estimated 5.7 million Americans of all ages have Alzheimer's.

An estimated 5.7 million Americans of all ages are living with Alzheimer's dementia in 2018. This number includes an estimated 5.5 million people age 65 and older and approximately 200,000 individuals under age 65 who have younger-onset Alzheimer's.
  • One in 10 people age 65 and older (10 percent) has Alzheimer's dementia.
  • Almost two-thirds of Americans with Alzheimer's are women.
  • Older African-Americans are about twice as likely to have Alzheimer's or other dementias as older whites.
  • Hispanics are about one and one-half times as likely to have Alzheimer's or other dementias as older whites.
As the number of older Americans grows rapidly, so too will the numbers of new and existing cases of Alzheimer's. Today, someone in the United States develops Alzheimer's every 65 seconds. By mid-century, someone in the United States will develop the disease every 33 seconds.

Mortality from Alzheimer's is shockingly high, but mortality so often comes with a steep cost for lifetime suffering.  Alzheimer's disease is the only top 10 cause of death in the United States that cannot be prevented, cured or even slowed.

Alzheimer's disease is the sixth-leading cause of death in the United States, and the fifth-leading cause of death among those age 65 and older. It also is a leading cause of disability and poor health.
Although deaths from other major causes have decreased significantly, official records indicate that deaths from Alzheimer's disease have increased significantly. Between 2000 and 2015, deaths from Alzheimer's disease as recorded on death certificates increased 123 percent, while deaths from the number one cause of death (heart disease) decreased 11 percent.  Among people age 70, 61 percent of those with Alzheimer's are expected to die before the age of 80 compared with 30 percent of people without Alzheimer's — a rate twice as high.

There are tragically few options for those suffering from conditions with this diagnosis.  Long Term Care Insurance (LTCI) can help, but paying privately is the option selected by the vast majority of those who will spend down assets in order to qualify for Medicaid.  Medicare does not help unless there is a hospitalization, and the benefit is limited. The article notes that families with dementia can forget home care or memory care because Medicare does not cover these treatments or care. 

The challenge of financial planning with dementia in mind is not new. The challenge is certainly becoming a bigger issue with the significant number of Boomers, and the dwindling options available to consumers. The wise seek early legal and financial counsel. The unwise risk losing everything.

Sunday, February 11, 2018

Federal Court Holds Long-Term Care Insurance Company Breached Policyholder's Contract by Raising Premiums


A U.S. court of appeals has ruled  that a long-term care insurance company breached its contract with a policyholder who purchased a "Reduced-Pay at 65" policy when it raised her premiums after age 65. Newman v. Metropolitan Life Insurance Company (U.S. Ct. App., 7th Cir., No. 17-1844, Feb. 6, 2018).  The case represents a rare holding in favor of policy holders against long term care insurance companies pursuing claims arising from dramatic premium increases. 
The plaintiff, Margery Newman, purchased a long-term care insurance policy from Metropolitan Life Insurance Company when she was age 56. She chose an option called "Reduced-Pay at 65" in which she paid higher premiums until she reached age 65, when the premium would drop to half the original amount. The long-term care insurance contract set out the terms of the reduced-pay option. It also stated that the company could increase premiums on policyholders in the same "class." When Ms. Newman was 67 years old, the company notified her that it was doubling her premium.
Ms. Newman sued MetLife for breach of contract and fraudulent and deceptive business practices, among other claims. The company argued that the increase was imposed on a class-wide basis and applied to all long-term care policyholders over the age of 65, including reduced-pay policyholders. The U.S. district court granted the company's motion to dismiss, ruling that the contract permitted the company to raise Ms. Newman's premium. Ms. Newman appealed.
The U.S. Court of Appeals, 7th Circuit, reversed, holding that the company breached its contract when it raised Ms. Newman's premium. According to the court, "none of the four references in the policy to [the company's] right to change premiums sufficed to disabuse a reasonable person of the understanding that purchasing the Reduced-Pay option took her out of the class of policyholders who were at risk of having their premium increased after their post-age-65 anniversary." The court also allowed Ms. Newman's claims for fraudulent and deceptive business practices to proceed.  The Court ruled that Ms. Newman showed sufficient evidence that the company's marketing of the policy was deceptive and unfair to proceed with those claims.
Although it is possible, an appeal to the United States Supreme Court is unlikely.  

Monday, April 10, 2017

Major Long Term Care Insurance Company Declared Insolvent

Clients have heard me say many times that the long term care insurance industry is the canary struggling in the mine pointing to greater complications with the current health care system's reliance upon skilled nursing facilities to reduce more expensive  hospitalizations. Long-term-care insurance is designed  to shield families from crushing nursing home costs. But, the industry has reeled in recent years as health care policy encourages more, not less, institutional care for the elderly. 

Among the reasons consumers reject these policies is that the already expensive premiums are likely to increase. The increases are necessary, according to the industry, because claims made on the policies are increasing at unpredictably high rates, threatening the solvency of the policies.   Because the health care system encourages more, not less, long-term institutional care, the policies become economically unsound for both the insurance company and consumers Last year, the entire LTCI industry sold only about 100,000 policies, a stunningly low number at a time when more than 8,000 Americans turn 65 each day.  In 2000, Americans purchased 750,000 policies.  

Unexpected evidence that the industry may be faring even worse than previously imagined comes with the announcement that Penn Treaty of Allentown, Pennsylvania was recently ordered to liquidate and wind down its affairs, orphaning tens of thousands of policyholders. Big insurance companies rarely fail in the United States due to incentives created by state regulations encouraging healthy insurance companies to purchase an ailing insurer after which the troubled business simply vanishes  into the rescuer’s business. Policyholders may not even know what happened, or care, as long as claims are paid.  It is troubling that either Penn Treaty was so economically unsound that no buyer was interested, or that the industry is suffering so much that no other company or group of companies could rescue Penn Treaty.

According to the New York Times,  Penn Treaty’s failure may be a signal of more trouble to come in the long-term-care sector: 
“Liquidation is rare, but it does happen in bunches sometimes,” said Robert Hunter, director of insurance for the Consumer Federation of America. The organization has been warning about problems with long-term-care insurance since the early 1990s. In essence, companies underestimated the true cost of coverage and are struggling now to make good on all their promises.  “There is definitely talk in the street that it’s still a high-risk situation for quite a few companies,” he said. “It’s not a healthy situation.”
Each state has a  guarantee fund to rescue policyholders when an insurance company failures. The funds pay people’s claims, up to a predetermined limit that varies by state. The limit is $300,000 in Ohio, Florida, and Pennsylvania.  A few states cap guarantee-fund relief at $100,000. Others, like California and Connecticut, guarantee $500,000 and more. New Jersey is said to have no limit at all, but some analysts question that promise, especially if another big long-term-care insurer fails.  You can check every state's fund limit here.    

Regardless, in most states the fund only pays a claim to the reserve limit.  Many long term insurance policies have potential claims values two or three times that value.  If a policyholder experiences a loss in excess of the $300,000 limit, the policyholder has no recourse for the remainder of the insurance benefit the policyholder purchased.    

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