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Home My WebLink About00-05935 .~ , . ,",. "'"'" ~- -< DOROTHY Z, SCHULTZ, by her : IN THE COURT OF COMMON PLEAS Attorney-in-Fact, GLENN E, SCHULTZ,: CUMBERLAND CO" PENNSYLVANIA Plaintiffs : NO, 00 - S'935 c. Q;u~l l€luvj v. : CML ACTION ... LAW PENN TREATY LIFE INSURANCE COMPANY, Defendant : WRY TRIAL DEMANDED NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the foIlowing pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set, forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff, You may lose money or property or other rights important to you, YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE, IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LOCAL HELP. Ceftft/.ElmiBia1flltor CwnbEA-kL (?..vd~' 4th Flv01, Cwube.Il'a.ud CUWlly Cowthouse 'B~ ~oC-/~'1 c.ulisk., FA 17613 /.. (11 7) 2496299 ' ~ I 'I. EJti.y !Jure.. v. (, . Q...aI21J's L~ , pI} 11'0 '3 ?17- ;;J.1.{9-J ''-$- "=~.~ ~ " ~ , , ~ '~,;,. "'_1,' 'I', ^' I: :~ A VI S 0 USTED HA smo DEMANDADO/ A EN CORTE, Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe tomar accion dentro de los proximos veinte (20) dias despues de la notificacion de esta Demanda y Aviso radicando personalmente 0 por medio de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya, Se Ie advierte de que si usted falIa de tomar accion como se describe anterionnente, el caso puede proceder sin usted y un falIo por cualquier suma de dinero reclamada en la demanda 0 cualquier otra reclamacion 0 remedio solicitado por el dell1andante puede ser dictado en contra suya por la Corte sin mas aviso adicional. U sted puede perder dinero 0 propiedad u otros derechos importantes para usted, USTED DEBE LLEV AR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO 0 NO PUEDE PAGARLE A UNO, LLAME 0 VAYA A LA SIGUlENTE OFICINA PARA A VERIGUAR DONDE PUEDE ENCONTRAR ASISTENCIA LEGAL. Court Administrator 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 , "'- .- ", -.. ~ -~:_,,~.;,~ -1-, ,., '~~ DOROTHY Z. SCHULTZ, by her Attorney-in-Fact, GLENNE, SCHULTZ, Plaintiffs : IN THE COURT OF COMMON PLEAS : CUMBERLAND CO"PENNSYLVANIA : NO, iJa- 59.3$ ~ I.J..<-.--. v, CIVIL ACTION -LAW PENN TREATY LIFE INSURANCE COMPANY, Defendants JURY TRIAL DEMANDED COMPLAINT AND NOW, come the Plaintiffs, DOROTHY SCHULTZ AND GLENN E, SCHULTZ, husband and wife, by and through their attorneys, Schmidt, Ronca, and Kramer, P,C" and respectfully set forth as follows: I. PARTIES 1, Plaintiff, Dorothy Schultz, is an individual adult with a place of residence at Messiah Village, located at 100 Mt. Allen Drive, Mechanicsburg, Cumberland County, P A 17055. 2, Plaintiff, Reverend Glenn E, Schultz, is an individual adult with a place of residence at 4176 Nantucket Drive, Mechanicsburg, P A 17050-9103, 3, Plaintiff Glenn E, Schultz is husband and the attorney-in-fact for the Plaintiff Dorothy Schultz, 4, Defendant, Penn Treaty Life Insurance Company (hereinafter "Penn Treaty") is, upon information and belief, a corporation, partnership, proprietorship and/or other business entity duly organized and existing under the laws of the Commonwealth of Pennsylvania with a principle place of business located at 3440 Lehigh Street, Allentown, PA 18103, ~- ~ - ,~ - ~ '. ,-- o~.~,j 5, At all times mentioned herein, Defendant Penn Treaty regularly conducted business in Cumberland County, Pennsylvania, 6, At all times mentioned herein, Defendant Penn Treaty was acting through its duly authorized agents, servants, workmen and employees, acting at all times within the course and scope of their employment, II, BACKGROUND 7, On or about November 21, 1997, Plaintiff Dorothy Schultz applied for and purchased a Qualified Long Term Care Insurance Policy from Defendant Penn Treaty, 8, Plaintiff Dorothy Schultz's policy was applied for and paid for in Cumberland County, Pennsylvania, 9, A true and correct copy of the aforesaid application and policy is attached hereto, made a part hereof, and is marked as Exhibit "p,:', 10, The aforesaid insurance policy awards assisted living facility benefits on Page 4 of Plaint iff Dorothy Schultz's policy, It states in pertinent part: ASSISTED LIVING FACILITY BENEFITS For each day You are confined to an Assisted Living Facility and meet the Conditions of Eligibility, we will pay the lesser of: 1.) 100% of the Assisted Living Facility Daily Fee; or 2.) the Maximum Daily Benefit listed in the Policy Schedule; or 3,) the reasonable and customary charge for similar services rendered in the same geographic area, Assisted Living Facility Daily Fee is the facility's daily rate for room and board and assisted living services provided by the Assisted Living Facility's staff. Incidental expenses, such as Physician's services, medical supplies, medications, pharmaceuticals, toiletries, transportation charges and beautician's services will not be considered as part of the Assisted Living Facility Daily Fee. 2 ~::i "~ - ,. ',- 11. Plaintiffs' policy listed the Maximum Daily Benefit at $100,00 dollars per day for a Maximum Benefit Period of three (3) years on Page 3 of the policy, 12. The aforesaid insurance policy defines a pre-existing condition on Page 7 of the policy as follows: PRE-EXISTING CONDITIONS LIMITATION A "Pre-Existing Condition" means a condition for which medical advice or treatment was recommended by or received from a Physician within six (6) months preceding the Policy's Effective Date as shown in the Policy Schedule." Pre-Existing Conditions listed on the application are covered immediately, Pre-Existing Conditions which are not listed on the application are not covered unless the care and/or services begin six (6) months or more after the Effective Date shown in the Policy Schedule. 13, The application for insurance contained the following questions and answers regarding medical conditions: E, MEDICAL INFORMATION. 5, Within the past five (5) years, have you been: a,) Hospitalized or been medically advised to be hospitalized? --1L.. Yes No 10, Within the past five (5) years, have you received any medical or surgical advice, examination or treatment for: c.] Depression, Psychosis or any other Mental, Nervous, Emotional or Brain Disorder? --1L.. Yes No If any question is answered "Yes", please list complete details. Include names, addresses, and dates of any doctors consulted, hospitalizations and treatment, or any form, received, If more space is needed, attach a separate sheet, signed by the applicant and check this box D, 3 '- ,-,-. ~ ~ . -, -;:: 14, In this box, Plaintiff wrote the following: Oct-1996-Hospitalized-Geisinger Medical Center Surgery for Colloid Cyst-Non-malignant Dr, John S, Martin-Geisinger Medical Center Dr, Robert W, Brennan-Hershey Medical Center, 15, All information provided by the Plaintiff to Penn Treaty in the medical information section of its application was true, correct and accurate on November 21, 1997, 16, Plaintiff had a history of memory loss which had started to worsen beginning in 1993, triggered by a move from Chambersburg to Mechanicsburg, 17, As a result of the worsening memory loss, Plaintiff was referred to Paul J. Eslinger, Ph.D" a professor of neurology and behavioral science at Hershey Medical Center, for an evaluation, 18, Dr. Eslinger performed an initial evaluation and referred the Plaintiff to Robert Brennan, M,D" a senior neurologist at Hershey Medical Center to rule out an organic cause of her worsening memory problems. 19, As a result of the referral to Robert Brennan, M,D" a routine MRI found a colloid cyst in the right fronta1lobe of her brain, 20, The Plaintiff was then referred to J. Scott Martin, M,D., a neurosurgeon at Geisinger Medical Center where a right craniotomy and removal of a cyst was performed on October 22, 1996, 21. As a complication of that surgery, Plaintiff also sufftlred a right frontal lobe hemorrhagic infarc, 22, Following the surgery, Dr. Brennan noted gradual improvement but a tendency for short term memory impairment, together with confabulation and cognitive 4 ,~-,~ " -'.~ ,j." .,-,,~: phenomena similar to reduplicative para-amnesia; it is believed and averred that the latter type of deficits are consistent with a right frontal lobe damage and represent post- operative complication of treatment. 23, In the summer of 1997, she continued to manifest symptoms such as difficulty in regulating and managing her activities, anticipate details of plans, keeping track of changing information, and responding to situations in a flexible and adoptive fashion, all of which are believed and averred to be associated with frontal lobe damage, 24, All such information referred to in the preceding paragraphs was readily obtainable and available to Penn Treaty from the records of Dr. Martin, Dr. Brennan, Hershey Medical Center, and Geisinger Medical Center at the time of application by the Plaintiff. 25, On February 24, 1998, Plaintiff suffered a massive grand mal seizure requiring an inpatient stay at Milton S, Hershey Medical Center. 26, Subsequent to her discharge from Hershey Medical Center, Plaintiff continued to deteriorate and according to a medical evaluation done on December IS, 1998 by Dr. Raymond Reichwein (successor to Dr. Brennan at the neurology section of Milton S, Hershey Medical Center) who concluded that Plaintiff showed chronic cognitive and dysfunction/short term memory loss attributable to both prior neurological history, and right hemorrhagic stroke after colloid cyst resection; significantly also diagnosed with having developed a separate disease process in the nature of secondary seizure disorder which he diagnosed as a slowly progressive cognitive memory dysfunction representing either progressive dementia or Alzheimer's Disease, 5 -. /, " ,'=>" "~I 27, Tile Plaintiffs progressive dementia continued to deteriorate to the point where she required in-home nursing care in March and April of 1999, 28, On or about April 22, 1999, Plaintiff, through her husband Glenn E, Schultz, filed a claim with Penn Treaty for the cost of that care, 29, At the time of that application on April 22, 1999, Plaintiffs complete neurological history was available to Penn Treaty from Dr, Martin, Dr. Brennan, Dr, Reichwein, Geisinger Medical Center, Hershey Medical Center, and Paul J, Eslinger, Ph,D, 30, As of April 22, 1999, all premiums had been paid under the said contract of insurance with Penn Treaty and there were no conditions precedent that had not been performed by Plaintiff, 31. On or about April 29, 1999, Penn Treaty, for the first time, began to investigate the Plaintiff s neurological history, 32, On or about May 5, 1999, Defendant Penn Treaty requested additional records regarding Plaintiff Dorothy Schultz's medical condition, 33, By May 8, 1999, Plaintiffs condition continued to deteriorate to such an extent that Plaintiff was moved to in-care assisted living status at the Country Meadows facility, at East Trindle Road, Mechanicsburg, P A 17055. 34, On or about May 25, 1999, Plaintiffs claim was reviewed and referred to a supervisor for Penn Treaty, Kay McLaughlin, 35, On or about July 8, 1999, Penn Treaty sent letter to Plaintiff Dorothy Schultz informing her that a decision would be made in thirty (30) days, 6 " .. '.. .' _"'_'.-L ';.:J,d ~_ ".1.'-"" '"--':.' 36, When Penn Treaty failed to make a decision on Plaintiff's claim within 30 days as promised in its July 8, 1999 letter, and as required by regulations of the Pennsylvania Department of Insurance, the son-in-law of the Plaintiff, David Morgan, filed an insurance complaint form against Penn Treaty with the Department of Insurance, 37, By its letter of October 19, 1999, Penn Treaty denied coverage to the Plaintiff on the basis that Plaintiff had failed to reveal cognitive problems which were documented and treated as far back as June, 1994; Penn Treaty offered as a compromise to pay one year's worth of benefits, 38, Plaintiff believes and avers that Penn Treaty's denial of coverage on October 19, 1999 with its offer of compromise to pay one (1) year's worth of benefits was done in bad faith and that Penn Treaty lacked a reasonable basis for denying benefits, and further, that Penn Treaty knew or recklessly disregarded it's lack of a reasonable basis, 39, Thereafter, Plaintiff retained an attorney, Charles E, Schmidt, Jr., Schmidt, Ronca & Kramer, P,C" Harrisburg, PA, who obtained and submitted to Penn Treaty a neuro-psychologist report from Paul J. Eslinger, PkD" Professor of Neurology and Behavioral Science, Clinical Neuro-psychologist at the Milton S, Hershey Medical Center, Hershey, P A, and who had evaluated Plaintiff in July of 1996 and again in July, 1997, 40, It was Dr, Eslinger's opinion in a report dated January 28, 2000, that the Plaintiff suffers of an underlying primary degenerative dementia and that current 7 ~, ,."L -.,-,<," ."-,, ,,-'-.,. vL";-,,,,~ symptoms are a combination of cerebral vascular disease and degenerative dementia, the latter of which has been slowly progressing over the past several years, 41, Said report had been generated as a result of a letter to Dr, Eslinger dated January 7,2000 from Plaintiff's attorney, 42, Said report was forwarded to Penn Treaty by letter from Plaintiff's attorney dated February 10, 2000, 43, By letter dated April 10, 2000, Penn Treaty decided to abandon its contest of the Plaintiff's claim and to pay full benefits under its qualified long term care insurance policy, COUNT I - BAD FAITH 44, Plaintiff incorporates allegations of paragraph 1 through 43 as iffully set forth at length herein, 45, Plaintiff believes and avers that Penn Treaty acted, in bad faith and breached its duty of good faith and fair dealing which it owed to her, the insured, in the following respects: a, failing to make monthly payments in accordance with its obligations under the policy at a time when Penn Treaty knew that Plaintiff was entitled to the benefits under terms of its contract of insurance, and at a time when Penn Treaty knew that it had no reasonable basis to contest the Plaintiff s claim; b, withholding payments from the Plaintiff while knowing the claim for benefits under said contract was valid; c, failing to reasonably and promptly investigate and process Plaintiff's claim for monthly benefits under said contract; d, failing to conduct a full investigation of Plaintiff's claim for montWy benefits under said contract and acting on the Plaintiff's application for benefits within 30 days of that application; 8 " :~ , , " ;,>~,~ " , , , d" ~, , , - e, denying Plaintiff's claim when it knew or recklessly disregarded medical proof available to it from Plaintiff's treating physicians and psychologists which clearly established Plaintiff's right to benefits; and f alleging that Plaintiff had made material onnSSlons and misstatements when purchasing Penn Treaty's policy when it knew that there was no evidence to support that defense, 46, Penn Treaty's actions constitute a violation of Pennsylvania statute, 42 P,A.C,S,A. 8371, which prohibits Penn Treaty from engaging in bad faith in transaction with its insureds, one of which was the Plaintiff. 47, As the sole and proximate result of Defendant's conduct, Plaintiff's claim damages for the following: a, interest and overdue benefits; b, attorney's fees and costs; and c, punitive damages for reckless and/or intentional conduct in denying Plaintiff's claim, WHEREFORE, the Plaintiff demands judgment against the Defendant, Penn Treaty, an amount in excess of Thirty-Five-Thousand-Dollars ($35,000,00), being the amount required for compulsory arbitration, together with interest and costs, COUNT II - VIOLATION OF THE UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW 48, Plaintiff incorporates allegations of paragraph 1 through 47 as iffully set forth at length herein, 49, The Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P,S, Section 201, et. seq" prohibits "unfair methods of competition or unfair or deceptive acts or practices in the conduct of any trade or business," An unfair or deceptive act or practice is defined, in part in 9 201-2(4), as: 9 "" ~L d -, ' 'L,-,.,~o,~ ,- -~ "'-i~ (xiv) failing to comply with the terms of any written guarantee or warranty given to the buyer at, prior to, or after a contract for the purchase of goods or services is made, (xxi) .., fraudulent or deceptive conduct which creates likelihood of confusion or of misunderstanding, 50, The Defendant Penn Treaty has violated the Pennsylvania Unfair Trade Practices Consumer Protection Law, 73 P,S, Section 201, et,seq. by committing unfair and deceptive acts and practices in the course of its business in the following respects: a, Conducting an unfair and nonobjective post-loss investigation, which yielded results directly contradictory to the medical evidence presented to the Defendant by the Plaintiff's treating physicians, b, Intentionally delaying the Plaintiffs' claim and by acting in a manner that was frivolous, motivated by self-interest, and ill will, c, Making material misrepresentations in its accordance satisfaction agreement concerning the nature of its contractual obligations to the Plaintiffs, in an effort to deceive and mislead the Plaintiffs, d, Concocting a frivolous defense to deny Plaintiff Dorothy Schultz's claim on the basis that she had misrepresented herself, which had no basis in fact. e, Unnecessarily and unreasonably compelling Plaintiffs to hire an attorney to recover their rightful benefits under their qualified long term care insurance policy with the Defendant. 51. Defendant Penn Treaty's conduct constitutes Improper performance of its contractual obligation, which constitutes misfeasance and unfair or deceptive acts and practices prohibited by the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P,S, Section 201, et, seq, 52. As the sole and proximate result of the Defendant's conduct, the Plaintiff claims the following damages: a, interest on overdue benefits; 10 '" ~i ._, j,",-._ :J ;;, ___ b, attorney's fees and costs; and c, punitive damages for intentional and/or reckless conduct, WHEREFORE, Plaintiffs, Dorothy and Glenn Schultz, demand judgment of the Defendant, Penn Treaty, in an amount in excess of Thirty-Five-Thousand-Dollars ($35,000,00), being the amount required for compulsory arbitration, together with interest and costs, COUNT II - DECEIT 53, Plaintiff incorporates the allegations of paragraphs 1 through 52 as if fully set forth at length herein, 54, At all times relevant to Plaintiff's cause of action, Plaintiff acted reasonably in disclosing medical information on her insurance application on November 21, 1997, 55, The Defendant Penn Treaty impliedly and directly represented to the Plaintiff that in the event that she were to make a claim under the policy, a qualified long term care insurance policy, Defendant would handle her claim promptly, fairly, and in good faith, 56, Penn Treaty's representations to that effect were materially false and misleading in that Penn Treaty recklessly ignored by failing to investigate Plaintiff's medical condition at the time of her application of November 21, 1997, and thereafter conducted such investigation only upon application for benefits in April, 1999 as a pretext not to pay benefits under its policy, 57, All representations, whether impliedly or directly, were made by the Defendant with deceitful intent. 58, Plaintiff relied upon the representations of Penn Treaty when she applied for and purchased Penn Treaty's qualified long term care insurance policy on November 21, 1997, 59, As the sole and proximate result of Penn Treaty's deceit, the Plaintiff claims damages for loss of the following: 11 ,,.,- - " ,', _ -' >1.'-' -"i .~O' ~ ' 'J VERIFICATION BASED UPON PERSONAL KNOWLEDGE AND INFORMATION OBTAINED THROUGH COUNSEL We, GLENN and DOROTHY SCHULTZ, verify that we are the Plaintiffs in the foregoing action and that the attached Complaint is based upon information which has been gathered by our counsel in the preparation of this lawsuit. The language of the Complaint, to the extent that it is based upon information which we have given to our counsel, is true and correct to the best of our knowledge, information and belief, To the extent that the contents of the Complaint is that of counsel, we relied upon counsel making this Verification, We understand that intentional false statements herein are subject to the penalties of 18 Pa.C,S.A. ~4904 relating to unsworn falsifications to authorities. Date: 1<;;- 4....,,,.... ~OP'" L.z: U-L Glenn Schultz, Attorn -Fact for Dorothy Schultz Date: I ~ fl.... r"'s t 2..c..b (:f~ z:.- ~ (A~I1<:"-I...-f-.~r Dorothy Schultz ' -Q.... 0..... n., ~d.... /-h.. ') ." -- ,- --,' ~"- - -- , ~,-;. a, difference between the policy as it was represented at time of sale and the value at the time the claim arose; b, interest on overdue benefits; c, attorney's fees and costs; and d. punitive damages for intentional and/or reckless conduct. WHEREFORE, Plaintiffs, Dorothy and Glenn Schultz, demand judgment of the Defendant, Penn Treaty, in an amount in excess of Thirty-Five Thousand Dollars (35,000,00), being the amount required for compulsory arbitration, together with interest and costs, I submitted, SC R,P,C, By: Charles E. Schmidt, Jr" Esquire ill #19198 209 State Street Harrisburg, P A 17101 717-232-6300 Attorney for Plaintiffs 12 ~illll:iIilH~~fl~..U!~~i~~'!.'l~&~~~_iIilIl!lll!lllV- 7"" "".~~,,_o-_,="_"H"""----"'<","",~'" ~".",-,-_'" - "-,_,,, ,~~",',~'___.' """" ',_,'__ _1'___ p ~ ~ h ~ Ih '1 0 0 C) v, C\ ~ I 0 D 0\ ~ l:v 'i rr --0 - ~ i- $ _ ~-_c -- ,., -,-~ ,,-""- , - ~'~ ~ ',- (') CJ ~.~ \::':' , I U ~Tj, !> ! [I; :~ -- -') T';-' W" ~'-,) , , ",-j B -<.- " C.:) r r" L~ ~:: ..e-. '::,;,) U Z C~:' ~;,: () ,- C.... ;~;rn .J> c::- (,) 2~~ ~ .:< '''-..) .J.--'. (::> :D -< ^",' I 10-,,:'; , , -- < ~'~--~-'-----'-'---'''-'' PENN TREA TY LIFE INSURANCE COMPANY 3440 Lehigh Street, P.O. Box 7066 Allentown, PA 18105-7066 (800) 362-0700 NOTICE TO BUYER: This Policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations. CONSIDERA TlON We agree to insure You for the benefits stated in this Policy in consideration of the application received and the payment of the premium, subject to all of the terms, definitions, provisions, limitations and exclusions contained herein, If You die while insured under the policy, We will refund the part of any premium paid for the period after Your :'i,:., ,death. The refund will be made within thirty (30) days of Our receipt of written notice of Your death. It will be 1~;.',/,"paidto Your estate, ~l~i"(~,~;\~l:::,' " ,,' EFFECTIVE DATE - ' ~'i'::,,::;Evjdenceof insurability is required before the coverage is provided, Upon approval of Your application, 'coverage will begin at twelve o'clock noon (12:00 p,m.), standard time, at Your residence on the Effective Date shown in the Policy Schedule. It ends at twelve o'clock noon (12:00 p,m.), standard time, on the first renewal date. RENEWABILITY GUARANTEED RENEWABLE - PREMIUMS SUBJECT TO CHANGE This Policy is guaranteed renewable for Your lifetime. It may be kept in force by the timely payment of premiums. We cannot refuse to renew this Policy as long as You pay the premiums. We can change the renewal premium rates. We can only change them if they are changed for all policies in Your state on this Policy Form, Renewal premiums due after a change is implemented will be based on the new rate, Notice of any change in rates will be sent at least thirty-one (31) days in advance. NOTICE OF THIRTY (30) DA Y RIGHT TO EXAMINE POLICY Carefully read this Policy as soon as You receive it. If You are not satisfied for any reason, You may return it to Us, or Our authorized agent, within thirty (30) days after You receive it. We will refund all of the premiums paid in full directly to You within thirty (30) days after the policy is returned, The policy will then be considered void from the beginning. CAUTION: THE ISSUANCE OF THIS LONG-TERM CARE POLICY IS BASED UPON YOUR RESPONSES TO THE QUESTIONS ON YOUR APPLICATION. A COPY OF YOUR APPLICATION IS ATTACHED. IF YOUR ANSWERS ARE INCORRECT OR UNTRUE, WE HAVE THE RIGHT TO DENY BENEFITS OR RESCIND YOUR POLICY. THE BEST TIME TO CLEAR UP ANY QUESTIONS IS NOW, BEFORE A CLAIM ARISESI IF, FOR ANY REASON, ANY OF YOUR ANSWERS ARE INCORRECT, CONTACT US A TOUR HOME OFFICE. OUR ADDRESS IS 3440 LEHIGH STREET, P.O. BOX 7066, ALLENTOWN, PA 18105-7066. THIS POLICY IS NOT A MEDICARE SUPPLEMENT POLICY: If You are eligible for Medicare, review the Medicare Supplement Buyer's Guide available from Us. '. THIS IS A NON-PARTlCIPA TING POLICY L TCTP-6000(PA)-P PAGE 1 TABLE OF CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. ~ ' --,~~ " ,,-~" - <' ,'- . ~, .::.." Notice to Buyer Consideration Effective Date Renewability Notice of Thirty (30) Day Right to Examine Policy Caution Statement Policy Schedule Page Section I: Policy Benefit Provisions Assisted Living Facility Benefits ' Nursing Facility Benefits Adult Day Care Benefits Hospice Care Benefits Respite Care Benefits Section II: Conditions of Eligibility, " -.'---" _ _ '; ""J_' -", Section 11/: BenefitLimitations Maximum Daily Benefit , , Maximum Benefit Period Adult Day Carel Hospice Care Maximum BenefitPeriod Elimination, Period Pre-Existing Conditions Limitation 11. S~ction IV: Additional Benefits Alternative Plan of Care Restoration of Benefits Waiver of Premium Benefit BedReservation Benefit'". , S~ction V: Additional Features i"'i Third PartyNotices.~;:'i' ',..:: , -"., -'c',"'-' >., " ,-' ",~-,,-:',,"'-)--~'-',-,<:,>-,--'_" ,'Continuation forJUzh~irn.er's Dise~~~tVi"r\ ,,",,' Extensio'riofBerief;ts """?:":"'!.,,.:, ,Sectio~W;E;C/~~i~i,s:J/.Ih~t's NotC~J~ie(i> ' ,<.,",,' "', "." /. - - ,. ',,' '-"'- 'sec~ion, VII: General Contract Provisions, " Application Page 1 1 1 1 1 1 3 4 4 4 5 5 5 6 7 7 7 7 7 7 7 7 8 8 8 8 8 9 9' ; 9 ;1,' 9,10 Attached 9. 10. L TCTP-6000(PA)-P PAGE 2 . ...... ..",~--_...""- ~ ,U'~' POLICY NUMBER P450446 INSURED DOROTHYZ SCHULTZ ::; , -.,'. ,~. "~~"""""""-"'"">"~-""''''"-' EFFECTIVE DA TE 11/21/97 FIRST RENEWAL DATE < /I; , AGE 71 INITIAL PREMIUM $ 161,89 POLICY FEE $ 25.00 PREMIUM MODES AND AMOUNTS SEMI-ANNUAL QUARTERL Y $ 790.92 $ 403.07 AUTOMATIC BANK WITHDRAWAL (ACH) $ 129.29 (MONTHLY) ANNUAL $ 1,521.00 MAXIMUM DAIL Y BENEFIT MAXIMUM BENEFIT PERIOD ADUL T DA Y CARE DAILY BENEFIT (Fifty percent (50%) of the Maximum Daily Benefit) HOSPICE CARE DAIL Y BENEFIT (Fifty percent.(50%) of the Maximum Daily Benefit) ADULT DA Y CARE/HOSPICE CARE MAXIMUM BENEFIT PERIOD (Fifty percent(50%) ofthe Maximum Benefit Period) ,i"RESPITECARE DAILY BENEFIT AMOUNT ~;~~;tij;,;~;:\;:-;t!c~,~Y"!i,,l'~J~':~.;,;_};~-'::(,~ -~r '::;' ).- ~ '- - ';" ,'- :.' ' ~~rB.t~SPITECAREBENEFITPERIOD :!\",:;' (Per Calendar Year) ,,' ',' . , '-"\' , .',.-, ' ELIMINA TIONPERIOD AL TERNA TIVE PLAN OF CARE BED RESERVATION RESTORA TION OF BENEFITS WAIVER OF PREMIUM 1,.........- . -~, '; 12/21/97 " RENEWAL PREMIUM $ 136.89 MONTHL Y $ 136.89 $100.00 1095 DAYS $ 50.00 $ 50.00 548 DAYS $ 50.00 15 DAYS, 0 DAYS INCLUDED 30 DAYS INCLUDED INCLUDED THE PREMIUMS SHOWN ABOVE INCLUDE PREMIUMS FOR ANY RIDERS ISSUED ON THE SAME DA TE AS THIS POLICY. BENEFIT RIDERS ISSUED ON THE SAME DA TE AS THIS POLICY 100.00 TAX QUALIFIED HOME HEALTH CARE L rCTP-6000(PA)-P PAGE 3 ~"~>C;_~_~'" ,-_ ".- --'~""'"--"_.-'.~'--" ,. ..- , -,-" -;---:;;;-:::,~,,,:,..._-~---,-,-,-_..._---- ., . .~.........~"_~, "~~.~ "O~_~"' _.~O. ,_~" ..'.,_._.___"~__ .,_, .--'-.--~.....---.--.. - . . t ...__i 405.00 .-- ...".-" --, ._----." '--"-'---'-~--' - .;Jt " - "',,"'.. ~ . ~ ~'..........I~"J; ,. ,. '"'.&lid .,~~,..:." " . ,1""",_...- ~"'illll"'~'~"'~;,,'tii?"j This ~e~tion provide~ You with information about the lo~g~terlTi' care services covered by this Policy ,B~~~flts are available for Ass!sted Living ~acilities, Nursing Facilities, Adult Day Care, Hospice Care and Respite Care. What follows IS a~ explanation of each of these benefits, an explanation of how You qualify to receive these benefits, and ,defi~ltions of important words and terms which will help You understand these benefits. Throughout this POliCY, Important words and terms appear in bold print. They appear in italicized, bold print where they are defined, ' Whenever "You" and "Your" appears in this Policy, it refers to the Insured listed in the Policy Schedule' "We", "Us" and "Our" refers to Penn Treaty Life Insurance Company, ' ' ASSISTED LIVING FACiliTY BENEFITS For each day You are confined to an Assisted Living Facility and meet the Conditions of Eligibility We will pay the lesser of: ' , 1,} 100% of the Assisted Living Facility Daily Fee; or 2,} the Maximum Daily Benefit listed in the Policy Schedule; or 3,} the reasonable and customary charge for similar services rendered in the same geographic area. Confined means assigned to a bed and physically present within the facility, An Assisted Living Facility is a facility that is licensed by the appropriate federal or state agency to engage primarily in providing care and unscheduled services to resident inpatients and which: ' 1,) provides twenty-four (24) hour a day care and services sufficient to support needs resulting from inability to perform Activities of Daily Living and/or Cognitive Impairment; 2.) has a trained and ready to respond employee on duty at all times to provide care and services; 3,) provides three (3) meals a day and accommodates special dietary needs; and 4,) has the appropriate methods and procedures to provide necessary assistance to residents in the management of prescribed medications, An Assisted Living Facility may sometimes be called a Residential Care Facility, Sheltered Living ,Fac;i1ity or an Adult Congregate Living Facility" Any facility, or section thereof, known by one of these '.', riames;:or any other name,will be considered eligi~leif it meets the Policy definition of an Assisted Liyil'!gFacility.;< ,', " " ,," . ',;, "'/fafacilityor institutiolJ (such as a congregate care facility or life care community) has multiple licenses and/or multiple purposes, only the section, wing, ward or unit (including a separate room or apartment) that specifically qualifies as an Assisted Living Facility will be eligible for benefits, Assisted Living Facility Daily,Fee is thefi:jcility's daily rate for room and board and assisted living services provided by the Assisted Living Facility's staff. Incidental expenses, such as Physician's services, medical supplies, medications, pharmaceuticals" toiletries, transportation charges and beautician's services will not be considered as part of the Assisted Living Facility Daily Fee. NURSING FACILITY BENEFITS For each day You are confined to a Nursing Facility and meet the Conditions of Eligibility, We will pay the Maximum Daily Benefit shown in the Policy Schedule, A Nursing Facility is a facility or distinctly separate part of a hospital or other institution which is licensed by the appropriate federal or state agency to engage primarily in providing nursing care and related services to inpatients, and which: . 1,) provides twenty-four (24) hour a day nursing services; 2.) has a nurse on duty or on call at all times; 3,) maintains clinical records for all patients; and 4,) has appropriate methods and procedures for handling and administering drugs and biologicals, A Nursing Facility may sometimes be called a Skilled Nursing Facility, Intermediate Care Facility, Custodial Care Facility or Personal Care Facility, Any facility, or section thereof, known by one of these names, or any other name, will be considered eligible if it meets the policy definition of a Nursing Facility, If a facility or institution (such as a congregate care facility or life care community) has multiple licenses and/or multiple purposes, only the section, wing, ward or unit (including a separate room or apartment) that specifically qualifies as a Nursing Facility will be eligible for benefits, LTCTP-6000(PA)-P PAGE 4 ---....'_.--"'....'-""~-_.,-_. . ''_.<.' __~.......'~_~~~__.""'"'~,....--.~~..-..n~...,'-...,.".,....,,.,.."""""=,,........,...,..,.,""=.,,-.,.,-"'_~'_;...,',o _.,...-,,~""..,...,<.."'. ;- -Ad - '" ~:W1Mllfg~ < POLICY BENEFIT PROVISIONS CONTINUED ADULT DAY CARE BENEFITS For each day You receiv~ Adult Day Care and meet the Conditions of Eligibility, We will pay the lesser of: 1.) the expense Incurred; 2,) 50% of the Maximum Daily Benefit listed in the Policy Schedule; 3,) the reasonable and customary charges for Adult Day Care rendered in the same geographic area, ' Adult Day Care is a program for two (2) or more individuals of social and health-related services provided during the day !n an ~dul.t. Day Care Center for the pur/?ose of suppo~ing frail, impaired elderly or other ,adults with a disability who can benefit from care In a group setting outside of the home, ' Adult Day Care Center is a facility that: 1.) is established and operated in accordance with any applicable state or local laws that are required in order to provide Adult Day Care; 2,) operates at least five (5) days per week for a minimum of five (5) hours per day, but is not an overnight facility; 3,) maintains a written record of medical services given to each client; and 4,) has established procedures for obtaining appropriate aid in the event of a medical emergency, HOSPICE CARE BENEFITS For each day You receive Hospice Care and meet the Conditions of Eligibility, We will pay the lesser of: 1.) the expense incurred; or 2.) 50% of the Maximum Daily Benefit listed in the Policy Schedule; or 3,) the reasonable and customary charges for Hospice Care rendered in the same geographic area, Hospice Care is outpatient services designed to provide palliative care, alleviate the physical, emotional, social and spiritual discomforts when You' are experiencing the 'last phase of life due to the existence of a terminal disease, and to provide supportive care to the primary care-giver and the family, RESPITE CARE BENEFITS :'-.' For each day You receive Respite Care and meet the Conditions of Eligibility, We will pay the lesser of: 1,) the expense incurred; or ' 2,) 50% of the Maximum Daily Benefit listed in the Policy Schedule; or, 3,) ,the {easonable and customary charges for similar services rendered in the same geographic area, Respite Care may consist of Home Health Care, Hospice Care, or care provided in an Assisted Living Facil~ty, a Nursing Facility or an Adult Day Care Center, and is intended to temporarily relieve a Family Member providing care, Home Health Care is skilled nursing services or other non-medical services performed in Your home by a home health aide, certified nurse assistant, medical social worker, occupational therapist, spee<1lh therapist, physical therapist, total parental nutrition specialist, enterostomal specialist, chemotherapy specialist, licensed visiting nurse, licensed vocational nurse (LVN), licensed practical nurse (LPN), or a licensed graduate nurse (RN), ; --' " , "LTCTP.6000(PA)-P PAGE 5 ~ "_,.__",~"-~_~~,,,",,....>,-,..,,......~........,.,,",,,,""__~~l~~_ _"""-.",.;:..,_'*.......,"~j,~""'""O;....Il'it:I!o~~i.:;;1;.*c'1>-:;;;?),~~,\l:""'_,~..,..,.",~=~~~..."""""'-""'"""'-"""'~n-'~" " , You become eligible to receive the benefits available under Section I of this policy if the care is received while coverage is in force under this policy, and a Licensed Health Care Practitioner certifies that Qualified Long- Term Care Services are required because you are a Chronicallv III Individual. , ,..~ . ~ , , ~--" .~~ "~ . , Uce~ed Health Care Practitioner is any Physician or any registered professional nurse, licensed socialworl<er or other individual who meets the requirements prescrtbed by the Secretary of Health and Human Services. A Licensed Health Care Practitipner may be any licensed practitioner of the healing arts operating within the scope of his/her license who is other than You or a Family Member, A Family Mem~e~ is You ,or Your spous~, or Your or Your spouse's respective parents, grandparents, siblings, children, grandchildren, aunts, uncles, cousins, nephews, nieces and in-laws, ' Qualified Long-Term Care Services means any necessary diagnostic; preventive, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance services, which: (a) are required by a Chronically 111 Individual; and, (b) provided pursuant to a Plan of Care prescribed by a Licensed Health Care Practitioner, Plan of Care means a written individualized plan of Qualified Long-Term Care Services prepared by a Licensed Health Care Practitioner which: (a) specifies the type of such services' that are necessary; and (b) certifies that You need substantial human assistance due to ,Your being a Chronically III Individual. Certification of Your condition may be required periodically, but not more than once every thirty-one (31) days. , Chronically //I Individual means an individual who has been certified by a Licensed Health Care Practitioner at any time within the preceding 12-month period as: (a) being unable to perform (without :,",),,;.S'o'substantial assistance from another individual) at least two ,(2) Activities of Daily Living for aper/od '" " ".ofatJ~ast ninety (90) days due toa loss offunctional capacity; or, having a level of disability similar to i(J~e;I$iV~lofdisab/lity described in (a); or, (b) requiring substantial, supervision to protect such individual ffrom:threats to health and safety due to s,evere Cognitive Impairment Activities of Daily Living are the basic human functional abilities required for You to remain independent. They are as follows: 1.) Eating is Your ability to get food from Your plate into Your mouth, 2,) Bathing is Your ability to gelinto or out of a tub or shower, and/orwash parts of Your body with a sponge or washcloth, 3.) Dressing is Your ability to dress appropriately for personal health and safety. 4,)Transferring is Your ability to get into and out of bed or chair,. 5,) Toileting is Your ability to transfer to toilet and complete hygienic measures such that Your health is not compromised, ' 6,) Continence is Your ability to control urination and defecation or, if not able to control urination or defecation, Your ability to complete hygienic measures such that Your health is not compromised, Cognitive Impairment is confusion andior disorientation resulting from a deterioration or loss of intellectual capacity that is not related to, or a result of, mental illness, but which can result from Alzheimer's Disease and other forms of Organic Brain, Syndrome. Cognitive Impairment must result in Your requiring substantial supervision to maintain Your safety and/or the safety of others. . The deterioration or loss of intellectual capacity is established through the use of standardized tests that reliably measure impairment in the following, areas: 1,) 2,) 3.) Short-term or long-term memory; Orientation as to person, place and time; Deductive or Abstract Reasoning, LTCTP-6000(PA)-P PAGE 6 "'-'-"'-''"~----i'",,",~''--'' --. ,o.__,__.._~_--,,-_. - -~~.:-...._.-_."",",,,^,,,,,-,. -~-,,--_. -,-,._~-- ~._-...,;.~.~_._-. .. -- --- --. -."-'.'--. .~,----'-",-=,-","" ~,4_,~.~ ~ , ~~~~,....,~-~."...,.^_.<-...,_..,-,---. ,..-..-...... .._~~. ~- ".... " , -I ... --Q ........-""'.- --...--- --- --I ~~ - ~ ^ 1-, -.-- ",- '"""~ ~-""!l~ , , UcefJse~f!~/th Care Practitioner is any Physician or any registered professional nurse, licensed social worl<er, or other Individual who meets the requirements prescribed by the Secretary of Health and Human SelVices, A Licensed Health Care Practitioner may be any licensed practitioner of the healing arts operating within the scope of his/her license who is other than You or a Family Member, A Family Member is You or Your spouse, or Your or Your spouse's respective parents, grandparents, siblings, children, grandchildren, aunts, uncles, cousins, nephews, nieces and in-laws, Qualified Long-Term Care Services means any necessary diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative selVices, and maintenance selVices, which: (a) are required by a Chronically III Individual; and, (b) provided pursuant to a Plan of Care prescribed by a Licensed Health Care Practitioner, Plan of Care means a written individualized plan of Qualified Long-Term Care Services prepared by a Licensed Health Care Practitioner which: (a) specifies the type of such selVices that are necessary; and (b) certifies that You need substantial human assistance due to Your being a Chronically III Individual. Certification of Your condition may be required periodically, but not more than once every thirty-one (31) days, . Chronically III Individual means an individual who has been certified by a Licensed Health Care 'Practitioner at any time within the preceding 12-month period as: (a) being unable to perform (without , " ' '"substantiall:lssistance from another individual) at least two (2) Activities of Daily Living for a period ',<;'i"", otatleast ninety (90) days due to a loss offunctional capacity; or, having a level of disability similar to ""h,~~;:theJevelof disability described in (a); or, (b) requiring .s.ubstantia,1 supelVision to protect such individual '1'~~'lfron'fthreats to health and safety due to severe Cogmtlve Impairment " I 1 1 i I i i1 q Ii " n II I) II " Activities of Daily Uving are the basic human functional abilities required for You to remain independent. They are as follows: 1.) Eating is Your ability to get food from Your plate into Your mouth, 2,) Bathing is Your ability to get into or out of a tub or shower, and/or wash parts of Your body with a sponge or washcloth, 3.) Dressing is Your ability to dress appropriately for personal health and safety. 4,) Transferring is Your ability to get into and out of bed or chai..., 5,) Toiletingis Your ability to transfer to toilet and complete hygienic measures such that Your health is not compromised. ' 6.) Continence is Your ability to control urination and defecation or, if not able to control urination or defecation, Your ability to complete hygienic measures such that Your health is not compromised, Cognitive Impairment is confusion andior disorientation resulting from a deterioration or loss of intellectual capacity that is not related to, or a result of, mental illness, but which can result from Alzheimer's Disease ,and other forms of Organic Brain Syndrome, Cognitive Impairment must result in Your requiring substantial supelVision to maintain Your safety and/or the safety of others, The deterioration or loss of intellectual capacity is established through the use of standardized tests that reliably measure impairment in the following areas: 1.) 2,) 3,) Short-term or long-term memory; Orientation as to person, place and time; Deductive or Abstract Reasoning. L TCTP-6000(PA)-P PAGE 6 ,~ ___, ._..'. -_C'_, ^ . ---~-_._-,_._--- !--- , , I,'" ~"""""'---~"~~"',,',.---..--,---'---~" ~ -, ,~~. ,~ . "'-=="""=~_'__._~ c--" '-"'"~"-----'----"""""""", , ,~"-,', -- ...-".'~~ "' J ~ ~" v . --. " -- ~'..i.-,,_, ,~ .....4 ~SECTION III: BENEFIT LIMITATIONS MAXIMUM DAILY BENEFIT The Maxim~m Daily Benefit is the maximum amount We will pay under anyone benefit, or combination of benefits, dUring anyone calendar day, The Maximum Daily Benefit is listed in the Policy Schedule, MAXIMUM BENEFIT PERIOD The Maximum Benefit Period, shown in the Policy Schedule, is the maximum number of days benefits are available for a confinement in an Assisted Living Facility and/or Nursing Facility or any combination of Assisted Living Facility and Nursing Facility confinements, during Your lifetime, unless benefits are restored in accordance with the Restoration of Benefits provision (described on page 7), Each day benefits are paid whether it be for a confinement in an Assisted Living Facility or confinement in an Nursing Facility, will count as ~ne (1) full day of the Maximum Benefit Period. ' ADULT DAY CARE / HOSPICE CARE MAXIMUM BENEFIT PERIOD The Adult Day Care / Hospice Care Maximum Benefit Period, shown in the Policy Schedule, is the maximum number of days benefits are available for Adult Day Care and/or Hospice Care, during Your lifetime, unless benefits are restored in accordance with the Restoration of Benefits provision. Each day benefits are paid, whether it be for AdultDay, Care or Hospice Care, will count as one (1) full day of the Adult Day Care / Hospice Care Maximum Benefit Period. ELIMINATION PERIOD '. 'The Elimination Period listed in the Policy Schedule is the number of days at the beginning of the Assisted LivingFacility or Nursing Facility confinement for which no benefits will be paid, For each day of ' confinement to be applied towards the satisfaction of the Elimination Period, the day of confinement must be ,'otherwise covered by the Policy and eligible for benefits, When benefits do begin, they will not be retroactive tothe beginning of the Elimination Period, The Elimination Period must be satisfied only once during the lifetime of this Policy, PRE-EXISTING CONDITIONS LIMITATION A Pre-Existing Condition is a condition for which medical advice or treatment was recommended by or received from a Physician within six (6) months preceding the Policy's Effective Date as shown in the Policy Schedule, Pre-Existing Conditions listed on the application are covered immediately. Pre-Existing Conditions which :"C',;',are not Iistedon the application are not covered unless the care and/or services begin six (6) months or more .3,::.. after the Effective Date showl) in the Policy Schedule. '.'.'<llsECTION IV: ADDITIONAL BENEFITS AND DEFINITIONS ALTERNATIVE PLAN OF CARE BENEFIT , ' ..-. ,- . ,If You would otherwise qualify for benefits for a confinement in an Assisted Living Facility or Nursing Facility, lJI!e may pay for services provided under a written Alternative Plan of Care, if such plan is a medically acceptable option, This, Alternative Plan of Care must be agreed on in advance by, You, Your Physician and Us, The Alternative Plan of Care can be at Your suggestion, but must be developed and , approved by health professionals, Benefits extended under the Alternative Plan of Care will be deducted from the Maximum Benefit Period listed in the Policy Schedule and will, correspondingly, reduce the benefits available for the other forms of care/services covered by this Policy Any benefits paid under the Alternative Plan of Care may serve as a deductible. In other words, if you enter a Nursing Facility/Assisted Living Facility after receiving benefits under the Alternative Plan of Care, benefits may not resume immediately. This deductible can be calculated by dividing the total amount paid under the Alternative Plan of Care by the Maximum Daily Benefit Amount. Whether benefits paid under the Alternative Plan of Care will actually serve as a deductible will be set forth and require your approval when the Alternative Plan of Care is considered. if L TCTP-6000(PA)-P I' if_ ~ft ' PAGE 7. ~ . RESTORATION OF BENEFITS , ,ftJBll T"'!'~t"...I.....'~ _ .-"~"'_ ,~.........,.JI,,," = ~ " .~'m'""" ,'"," .,;;;.;..l....J....,"". -"'cl. ,_ .1. =" ~ , '0:,.;.'; 'j~' ...'~_" "~~m."- -~~, Policy ~to the full original amounts listed in the Policy Schedule when: ' ,.,. 1,) You. have not been confined in an As.sisted Living Facility or Nursing Facility and have not received Adult Day Care, RespIte Care, Hospice Care, Home Health Care or Homemak~~/Comp~nion Care for ,one hundr:d and eighty (180) consecutive days; and 2,) Your PhysIcian certifies that You did not require and have not been advised to be confined to an Assisted Living Facility or Nursing Facility or receive Adult Day Care, Respite Care, ,Hospice Care, Home Health Care or Homemaker/Companion Care during the one hundred eighty (180) day period, There is no limit to the number of times the Maximum Benefit Period and Adult Day Care/ Hospice Care Maximum Benefit Period will restore as long as You meet the above requirements. Homemaker/Companion Care is assistance with the basic functional activities required to remain in your home. This assistance may be with meal preparation, shopping/travel, light housekeeping, laundry, telephoning, handling money/bill paying, WAIVER OF PREMIUM BENEFIT Once You have rece'ived benefits for ninety (90) consecutive days for confinement to an Assisted Living Facility or Nursing Facility, We will waive the payment of premiums coming due for this Policy and any riders attached to this Policy while You continue to be eligible for these benefits. We will apply any premium paid beyond the date You become eligible for these benefits to the next premium payment coming due, and reduce it accordingly, Should you die while eligible for the Waiver of Premium Benefit, the premium paid beyond the date you became eligible for this benefit will be refunded and paid to Your estate. \ BED RESERVATION BENEFIT II SECTION V: ADDITIONAL FEATURES THIRD PARTY NOTICES You have the right to designate at least one (1) person who is to receive notice of cancellation of Your Policy for, the nonpayment of premiums, Designation of this person does not constitute acceptance of any liability by this person for services provided to You, Your written designation shall include the person's full name and home address and shall become part of Our records, We shall notify You of the right to change this written designation at least on an annual basis, If You elect to designate such a person, Your Policy cannot be canceled for nonpayment of premium unl~ss We have notified the designated person at least thirty (30) days in advance of the cancellation date, Notice shall be given by first class United States mail, postage prepaid, and notice may not be given until thirty (30) days after a premium is due and unpaid. Notice shall be deemed to have been given as of five (5) days after the date of mailing to a third party, If You do not elect to designate a third party to receive notice of cancellation for nonpayment of premium, a written waiver dated and signed by You will become part of Our records. L TCTP-6000(PA)-P PAGE 8 "'-n_._..____..,. "..n~__'.'_"'_,,_.. _ ,------'-"'.,.."_.~_.,--_."'--~~ ~,. ,~-.",.,.,. ."..."."....~~,-'---,."~. ...,~-,-~-'-'" - ~.~.. , " - ~ .-",'~ ,-J ~/~ ADDITIONAL FEA TURES CONTINUED CONTINUATION FOR ALZHEIMER'S DISEASE AND OTHER FORMS OF COGNITIVE IMPAIRMENT OR LOSS OF FUNCTIONAL CAPACITY If Your Policy lapses, We will provide a retroactive continuation of coverage if We receive the following within five (5) months of the lapse: 1.} Satisfactory proof that You had Cognitive Impairment (including but not limited to Alzheimer's Disease) and/or loss of functional capacity on the renewal date; and 2,} Payment of all past-due premiums for this Policy and any riders attached to this Policy that were in force on the date of lapse. This continuation will provide uninterrupted coverage to the same extent that the policy would have provided had it not lapsed. ' ' EXTENSION OF BENEFITS Termination of Your Policy shall be without prejudice to any benefits payable for institutionalization if such institutionalization began while the Policy was In force and continues without interruption after termination, , The extension of benefits beyond the period the Policy is in force is limited to the duration of the benefit period. ~SECTION VI: EXCLUSIONS: WHAT'S NOT COVERED ~ This section sets forth the conditions under which payment will not be made, even if You otherwise qualify for benefits. , Exclusions: The Policy will not pay benefits for: ' l.j Charges for care or services that are provided while this coverage is not in force, , 2. Charges for care or services provided by a Family Member, unless pre-approved by Us. 3, Charges for,a confinement, use of a facility, services, supplies and care that You would not be legally obligated to pay in the absence of this insurance. , 4,} Charges for care or services that are payable under any Worker's Compensation or Occupational Disease Law, 5.} Charges for care or services that are required as a result of war, or an act of war, whether declared or not. 6.} Charges for care or services for mental, nervous or emotional disorders without demonstrable organic origin. (NOTE: ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN SYNDROMES ARE COVERED BY THE POLICY AS ANY OTHER SICKNESS). . , 7,}' Charges for care or services that are required as a result of attempted suicide or intentionally self-inflicted injuries, while sane or insane, . ,,' 8,} '.Charges for care or, services that are required as a result of Your commission of a felony or Your being engaged in an illegal occupation, ' ' , . 9.}, Charges for care or services that ,are paid by Medicare, Any portion of such charges not paid by Medicare will be considered, subject to the terms of this policy, '- ','~ SECTION VII: GENERAL CONTRACT PROVISIONS ! This s~ctionprovides You with information about the General Provisions included in Your Policy. Entire Contract; Changes: This Policy, including any attached papers, constitutes the entire contract. No change is valid until:, , " , . ',. '1'l approved by one of Our executive officers; and 2,' enaorsed hereon or attached hereto, No agent has authority to change this Policy or to waive any of its provisions, Time Limit on Certain Defenses: , 1,} If this policy has been in force for less than six (6) months, We may rescind it upon a shOWing of misrepresentation that is material to the acceptance of coverage. 2,} If this policy has been in force for at least six (6) months, but less than two (2) years, We may rescind it upon a showing of misrepresentalion that is both material to the acceptance for coverage and which pertains to a condition for which benefits are sought. 3,) If this policy has been in, force for !wq (2) years or more, We may rescind coverage only upon a showing offraudulent misrepresentation. ..:,~~:~:;:~~~~~~;r~ce -PeriO'd'PfittrtY-~~~',(3"1~a*~~;:~t;;...roFth~"'PaYmenrof'eaCh~Premiuriiaueafter . · the first premium, unng which time Your Policy conlinues In force, Reinstatement: If the renewal prel'Dtum is, not paid before..the. Gr.aye Perio? ends, '(our.uP()li,c~_~,ilU~ps_e~ ~ ~ ". "~' , " ~~ .___'_ - - - - _" _" ~ - "~'" ..I. ,'_____. ~ "'Gr:a"ce-Perio~: A gr~ce period .of thirty-one ,(31) days is gra"fited for the payment 01 eacn prernlUl1l "l,UC ,..,~, the firlltprel'luum, dUring which lime Your Policy contmues In force. . ' . "-, Reinstatement: If the rene~al premium is not paid before the, Grace Period ends, You~ Policy will lapse, Later a~ceptanc~ of the premll!m ~y Us, or by Our, agent authorlzEild to a~cept payment, Without requiring an !lpplicatlon fo~ remstatell)ent will remsta!e Your Policy, If We reqUire a remstateme)'lt ~pplication You will be Is~ued a conditional receipt for the premium, If We approve Your reinstatement application Your Policy will be remstated as of the date of Our approval, If We disapprove Your application, We must do so in writing within forty-five (45) days of the conditional receipt. Otherwise Your Policy will be reinstatedJorty-five (45) days after the date of the conditional receipt. The remstated Policy will cover only loss resulting from accidental injury as may occur after the date of reinstatement and 1055 due to sickness as may begin more than ten (10) days after the date of rei)'lstatement. In all oth~r respects, both Your apd Our rights ~nder the ,policy will be the same as before the policy lapsed: Any premiums We accept for a reinstatement will be applied to the period for which premium~ have not been paid, No premium will be applied to any period more tlian sixty (60) days before the oate of remstatement. ''ti.llii! " , Notice of Claim: We must receive written notice of claim within twenty (20) days of 1055, If not,as soon as reasonably_possible, Notice to the Home Office or authorized agent is acceptable. Notice should mclude Your name and Policy Number, ' , " Claim Forms: We will furnish forms to prove loss. We will do so upon Our receipt of notice of claim. If the forms are not furnished within fifteen (15) days, You will be considered to have complied if, within the time for filing proofs, You give Us written proof specifically describing the loss, , Proof of Loss: You must give Us written proof of loss within ninety (90) days from the occurrence of 1055. If You have a good reason for not doing 50, We will not contest the claim. However, You must give Us proof no later than one (1) year from the time normally required unless legally incapable, Time of Payment of Claims: Benefits payable under the policy for any loss incurred will be paid within thirty (30) days after receipt of written proof of loss, Any balance remaining unpaid at the end of Our liability will be paid immediately upon receipt of written proof. Payment of Claims: All benefits will be payable to You, Any accrued benefits unpaid at Your death will be palo to your estate., -- 1';;";~,,~;Sjckl~xamjnatjOn:At Our expens~, We shall have the right and opportunity to h~ve You examined when clOd, as often as We, may reasonably require while a claim is pending., , Legal Actions: No legal or equitable action shall be brought to recover on th, epolicy sooner than sixty (60) days after written proof of loss has been furnished. No action shall be brought after the expiration of three (3) years after the time written proof of loss is required to be furnished. Misstatement of Age: If Your age has been misstated, all amounts payable shall be such as the premium paid would have purchased at the correct age, , Unpaid Premium: When a claim is paid, any premium due and unpaid may be deducted from the claim payment. ' Conformity with StateSt, atutes: Any provision of the policy, which on its Eft, ective Date conflicts with the , statutes of Your state on such date, is amended to conform to Its minimum requirements, Please keep this Policy in a safe place with Your other important documents. IN WITNESS WHEREOF, We have caused this Policy to be signed by Our President and Secretary. ~h\\ .~ ,B~ p,g~ ,1 - 1 . I~: ~ ~ t j Ij \I 11 Ii I' j! " j , ! I 1 \., , -~-". Secretary President L TCTP-6000(PA)-P PAGE 10 >'- "___~"''---_r"'''~r,''''='~c''!''='''''''''''__'~'"-"''''''_~''''''''''''''~'~''~_-r-''',"",,~''''''~'~''''~'",.' d "",,,___._,,,,,,,,,.,,,,,,._ '~"".._"''''~ ~ ,~!r;'l/JlililIi 0\""" ,~~,.,.~o ' ".' ,.,' .:.,.... . - .-.- ~,'~" O';"l ~~~ - ..~~.~:.~ %~~JJ& '~, bttJ' '-' , ,,' . - :'"'~r,{:'0:C-':'::,1'f(t-;:r*;;:~:$i'17~'lr~;:r~4.:;;{~i;~'-i;~r3"-\44'~-'~ ,,)rO~"~~~'h{~.rh"~, ~-~ !l":~" -'iilI" ''I1IlI,'" "..- - , c' . i"V,"~i91'r-',...'':''7''.~.,,",' '~'"-;-:'-:~, -..-..,...,.,--. .....-,', =,..liiiI,' Le 19 Street;"P:O:'Box'7066',,,,#r,""'" ..'",." ...", '-;--" ,,,,, ,"""',""h l"" Allentown, PA 18105-7066 ' , (800) 362-0700 'I t TAX-QUALIFIED HOME HEALTH CARE RIDER ! Insured DOROTHY Z SCHULTZ A Part of Policy Number P450446 Rider Effective Date 11/21/97 Maximum Daily Benefit'100.00 Elimination Period ' 0- Rider Term Premium Included in Policv Premium Maximum Benefit Period 3YKARS Throughout this Rider, important words and terms appear in bold print, They appear in italicized bold print where they are defined, CONSIDERATION . We have ,issued t!1isRidenncon~ideration of: (a) the ~tatefT1en~s in the al'plication; and (b) the adval1ce </ payment ,of the Rider Term Premium shown above: Thls'Rlcjer Isa part of the Polley beanng the Polley <&~:Number shown above, ' If no Policy Number is shown above, this Rider is a part of the Policy to which it is ,"attached. The Policy of which this Rider is a part is called "the Policy" in this Rider. ' ' This Rider is, subject to all of thetermsi including the definitions and exclusions, of the Policy to which it is attached, except as stated in this Rider. EFFECTIVE DATE AND TERM This Rider takes effect as of the Rider Effective Date shown above. If no Rider Effective Date is shown above, this Rider takes effect at the same time as the Policy. This Rider will continue in effect for the Rider Term shown above, If no Rider Term is shown above, this Rider will continue in effect for the same term as the Policy. b \ , i I i RENEWAL AND PREMIUMS This Rider is renewable at the same time and under the same terms as the Policy, Any renewal of this Rider will require payment of the Rider Term Premium which applies on the renewal date. If no Rider Term Premium is shown above, the Rider Term Premium is included in the Policy premium shown in the Policy, Premium rates for this Rlder may be changed in the same way as premium rates for the Policy, HOMEMAKER CARE/HOME HEALTH CARE BENEFIT For each da:{ You receive, Homemaker Care and/or Home Health Care in Your Home and meet the Homemaker Care/Home Health Care Conditions of Eligibility, we will pay the lesser of: , 1'l 80% of the actual charge incurred; or, ' 2. 80% of the reasonable and customary fee for similar services provided in the same geographic re[!,ion; or 3,) 80 Yo of the Maximum Daily Benefit listed above. L TCTP-HHCR-P PAGE 1 ~_~--'..~.._~ ~~,o"..__'".. . -.------....- ; ____'.u~_"'~~""""'~~ . __ _~. =""""~.,.,..".,~-~.,:_""'.,....,...,.!,:-"..,..,,"',.,.,.,....,~_.,--"."<-.,-- .-...,_.._~~~-~ , '. ~k ,..,""" LfIIlIiM/liL (Continued) Horn.emaker Care is assistance with t~e Instrumental Activitie~ ~f Daily Living, Homemaker Care may be provided by a~yone~ other than a Family Member or someone living at your address prior to the inception of or need for, this assistance. (Please refer to the Policy for the definition of Family Member,) , The ~ns.trumental Activit~es of Daily Living are the basic functional activities required for You to remain In Your Home and Include the following: 1) Meal Preparation is your ability to prepare meals, includingcooking, 2) Shopping0'ravel i~ Your abilitY,to. utilize pUblic or private transportation to get to a store and shop for groceries, to pick up prescriptions and to get to medical appointments. 3) Light Hous~keeping is Ypur ability to maintain a safe and clean home living environment. Light Housekeeping does not Include any type of home construction or maintenance, lawn care,snow removal, maintenance of a vehicle, or any service provided outside of the home" 4) Laundry'is Yourability to wash and dry Your clothes, bed linens, etc, 5) Telephoning is Your ability to make telephone calls. , ' 6) Handling Money/Bill Paying is Your ability to deposit and/or withdraw funds at a financial institution, write a check to pay bills, etc: , ~; ,', . , , . ' ,Ho,r/e Health Care is skilled nursing services or other medical service~ performed in Your Home by' a ,licensed registered nurse (RN), licensed practical nurse' (LPN), licensed vocational nurse (LVN), ,chemotherapy specialist, enterostomal specialist, total parental nutrition specialist, physical therapist, speech " , ,therapIst or occupational therapist. Home Health Care also includes assistance with the Activities of Daily ,qv,ilJgand. may be provided by a home health aide or certified nurse's assistant. A Home Health Care ,'prClvider,nolnamed,here may also be used as long as they are qualified through education, training or 'expenence, and are approved in advance by Us. ' f" . The Activities of Daily Living are the basic human functional abilities required for You to remain independent. They are as follows: 1,) 'Eating is Your ability to get food from Your plate into Your mouth. 2.), Bathing is Your ability to get into or out of a tub or shower, and/or wash parts of Your body with a sponge or washcloth. 3,) Dressing i,s Your ability to dress appropriately for personal health and safety. ,4,) Transferring is Your ability to get into and out of bed or chair, , v ,5.) ToiletingisYour ability to transfer to toilet and complete hygienic measures such that Your health is not compromised. , , " , 6.} ':Continence is Your ability to control urination and defecation or, if not able to control urination or defecation, Your ability to complete hygienic measures such that Your health is not compromised,' ' , ~: -" ;:~," ; I.~ "".. , ' " THome isyour personal residence, whether it be in a private dwelling or a home for the retired or aged, It !doesnot include ,an Assisted Living Facility or Nursing Home. (Please refer to the Policy for the definitions (qf As~isteclLiving Facility and Nursing Home,) , HOMEMAKER CARE/HOME HEALTH CARE BENEFIT CONDITIONS OF ELIGIBILITY You become eligible to receive the Homemaker CarelHome Health Care Benefits offered by this Rider if a I-icensed Health Care Practitioner certifies that You are a Chronically 111 Individual. A Licensed Health Care Practitioner is any Physician or any registered professional nurse, licensed social worker. or other individual who meets the requirements prescribed by the Secretary of Health and Human Services. A Licensed Health Care Practitioner may be anyone other than You or a Family Member. (Please refer to the Policy for the definition of Physician,) L TCTP-HHCR.P PAGE 2 .. ~1.,," iiit "',' ","".'~~l"'':''''''~'!i, "~""","",~:hilf;';'~,",i .~;, ",,-... : "" "'-"1/,',.,.''\.~~~;al~bi,~,.,~ "" _.~,!:~<i~( t~i l~"r- r-- '''1'' " ,~ft~~i~'j !l ~~~~:'.ir~ ,j~f"~'fY;'~...".;..'J~jJlf!i~'-"'. ;',' ~', 111""[ Jr- ihif '~Yl7r'" ... """ ,~~. _............ ,,~_~_...," .. ,..... .. ,",__Il'l~_..! - R..." . ~' A Chronically 1/1 Individual is an individual who has been certified by a Licensed Health ~are Practition~r at any time within the preceding 12-month period as: (a) being unable to perform, (Without substantial ~::IC~~i~f~n"'o f..nl"n ~nt'\+hD." inrli\lirlll~l\ ~+ IO~Q+ *"Al^ f.,\ l\...+iui+i.o.e: ^~ I",,,,,,,au 1 "ui....... ;."'.. "'" ....o...,,..~ ",f ....... 1.........'""+ ........."'+u i#!l!llt."'J;",:;nrorll~aIlY,"'"P-"'''''''',__._..,,_.._... ~~ .L' """ '.', -,,' ". , .n., ,..,c-.i,';" '. ":;""'"...;.', ,.C,.. ,. '. '. ..0- , '. .", ,- ',;-", ,,,,," ,~..". ;.,,1-.';>","', OIJ;~"""'''>',,,,~'''''.~ ''''''''~>,>>,-"~""".\-~~,.;.i,, I'" ,,~~ "'.-~:;mtr.,,,,:..~",,,,.-,,".;V'~"~" ',at aFlY ,time within the prec'edirig 12:monthklle~riod'~a's:"'(a}l'6eifigiliITnatiIEl~t01iiperrormC0\WllIlVULC"""''''Q,..,....", <assist~mce from another individual) at least two (2) Activities of Daily Living for a period of at least"ninety "-::;;;;1 (90) ~ays ~ue to a loss of functional capacity; or, having a level of disability similar to the level of disability described In (a); or, (b) requiring substantial supervision to protect such individual from threats to health or safety due to severe Cognitive Impairment. Cognitive Impairment is confusion and/or disorientation resulting from a deterioration or loss of intellectual capacity that is not related to, or a result of, mental illness, but which can result from Alzheimer's disease and other forms of Organic Brain Syndrome, Cognitive Impairment must result in Your requiring substantial supervision to maintain Your safety and/or the safety of others, The deterioration or loss of intellectual capacity is established through the use of standardized tests that reliably measure impairment in the following areas: 1,) Short-term or long-term memory; 2.) Orientation as to person, place and time; 3,) Deductive or Abstract Reasoning, MAXIMUM DAILY BENEFIT The Maximum Daily Benefit is the maximum that will be paid for Homemaker Care and/or Home Health , Care, or any combination thereof, rendered during the same calendar day, The Maximum Daily Benefit is listed in the Rider Schedule. ',,' ,". , ;,,' ,,' MAXIMUM BENEFITPERIOD "The"MaximumBenefit Period is the maximum period of time during which you can receive Homemaker \:::Careand/or; Home Health ,Care'and qualify for benefits lmder this Rider, The Maximum Benefit. Period '/'"'1";<;::"':' ":'.'.,"., .".'...:'.".' ,""'-:""'-. ","', ,.,..., " .' ,c' . ;:':'k~begiris on the first day you receive Homemaker Care and/or Home Health Care covered by this Rider and "eQdsthe number of days/ater Jistedas the Maximum Benefit Period in the Rider Schedule on page 1 of this Rider, The Maximum Benefit Period is available once during the lifetime of this Rider, unless ,benefits are restored in accordance with the Restoration of Benefits provision listed on page 4 of this Rider,' , 100% CARE MANAGEMENT BENEFIT If You otherwise qualify for the Homemaker Care/Home Health Care Benefits and utilize Our Care Management service, We will pay the lesser of: 1.) '100% of the actual charge incurred; or 2,) 100% of the Maximum Daily Benefit listed in the Rider Schedule; or 3.) 100% of,the reasonable and customary charge for similar services rendered in the same geographic area. Care Management is provided through an independent agency or entity, designated by Us, which is q~alifie~ to perform a comprehensive, face-to-face assessment of Your abilities. The Care Management service will develop a written plan of care designed to meet Your individual needs and, if You so desire, also arrange for the actual delivery of the Homemaker Care and/or Home Health Care, L TCTP-HHCR-P PAGE 3 _...."'...~..,~.,..... ,.,,---.... ,-~."...___,_,,_ ). c . ""'".............,...-. "~ -.~,~~...._......,....~--~. ".,.. ..',,, -.-.."..._._~~.." . ~,~ , ./ " u\ . ,~, (Continued) FAMILY MEMBER BENEFITS Family Member as Caregiver Benefit , ' As s!'l forth on page 1 of this ~i~er, neither Homemake~ Care nor,Home Health Care may be provided by a Family Member. or someone hVlng at Your address poor to t!1~ Inception of, or need for, these services, however, a Family Meml?er, other than ~ spouse or someone hVlng at Your address prior to the inception of, or need for, these servlces, may provide Homemaker Care and/or, Home Health Care if approved in advance by Us, To request that such a Family Member provide Homemaker Care and/or Home Health Care and be e,ligibl~ f?r t~e benefits of this Rider, You simply have. to call U.s at (800) 865-8722 or write Us at Our Home Office within fifteen (15) calendar days of the care/services beginning, (Your spouse and anyone living at Your address prior to the Inception of, or need for, Homemaker Care and/or Home Health Care will not be considered for this benefit.) , Family Member Training Benefit If any Family Member requires training to provide the care/services You need at Home, We will fay for,the reasonable and customal).' costs of this training, The maximum We will pay during the lifetime, 0 tliis po, licy for the training of a FamIly Member is five (5) times the amount of Your original Maximum Daily Benefit. The training must be for tlie specific purpose of preparing the Family Member to provide for Your care and must be approved in advance by Us. To request that the Family Member Training Benefit be made available to a Family Member, You simply have to call Us at Our Home Office prior to the Family Member being trained." , .WAIVER OF PREMIUM BENEFIT Once You have received the Homemaker Care/HomeHealth Care ,Benefit for ninety (90) continuous days or more on a regular basis, (aregular basis is five (5) days or more per week), Wewifl waive the payment of 'premiums coming due, for the Policy and all Riders attached thereto While You continue to be eligible for, the Homemaker CarelHome Health Care Benefit and receive Homemaker Care and/or Home Health Care on " a regular basis, We will apply any premium paid beyond the date You become eligible for the Waiver of ,( Premium Benefit to the, next premlum'payment coming due and, reduce it accordingly, Should you die while ,eligiblefor the Waiver of Premium Benefit, the premium paid beyond the date You became eligible for this "benefitwillberefunded and paidto Your estate. RESTORATION OF BENEFITS The Maximum Benefit Period of this Rid!:lr will be restored to the full original amount listed in the Rider Schedule on Page 1 of this Rider when: " , 1.) You have not received Homemaker Care or Home Health Care, or been confined to a ASl:!isted Living Facility or Nursing Facility, or received Adult Day Care or Hospice Care, for a penod of one hundred and eighty (180) consecutive days; and 2,) Your Physician certifies that You did not require and have not been advised to receive ,HomemakerCare, Home Health Care, Adult Day Care or Hospice Care, or to be confined to " an. Assisted Living Facility or Nursing Facility, during the one hundred and eighty (180) day ",' ""p,eriod, ".,"',' ,,' " If you have other policies with Penn Treaty . . . . ' " . , Should benefits for care/services covered by this rider on a charge-incurred basis also be payable under any ottler polic.'l,and/or rider issued by Penn- Treaty Life Insl!rance COJ'!lpany, or its subsidiary compa.ny, Ne!Work . America Life h1suranC6 Company, the benefits to be paid under thiS policy shall not, when combined With the benefits payable under said other policies/riders, exceed the actual charge incurred or the reasonable and customary fee for similar care/services rendered in the same geographic region, whichever is less, Benefits will be paid under this policy without regard to any coverage maintained with, or benefits paid by, any private insurer other than Penn Treaty Life Insurance Company or Network America Life Insurance Company, ' , , TERMINATION This Rider will terminate on the earliest ,of: 1,) the da~e th,e P~licy tern:inat~s; or ~.) the end ,?f the last pe~,~d for which the Rider Term Premium reqUired to keep thiS Rider In force IS paid, subject to the Grace Penod In the Policy. Signed for us at Allentown, Pennsylvania. ~~^~ President L TCTP-HHCR-P , PA,GE 4'iIIj'i~~l1l1'ri,f" ~=,.ltI;. f'~'/;l:IJlii -, /"!,J",i,','IL,I"J,IO,I,1",,,1,,1,~1Il..,.:'.,~:....'4.;T.~.::.. .;iI$:;L"~''c~I ' IU,: ",C" ".. ',.' O:-j.,...,..'.... "....., .. p , , 'aty' lIe nsurance omnan, Y,'. enn.,re , ""'",.','.",'"",, ,,'~,,'. :' ,,:.,! > :',:'f" -"..>-> ." ," _;,~"_:'~". -':' - '-,' '-:"CO -",'}'--' '- -'" -_','\_'" _ ,_ - '- _ '.'," -' N_, - . . - '-" - . :.;.i1II\lI1'1iYI,~_Il_" , ll~(c[r:[:: I - ~~~~",'q{r.,\,n""-"'<~;;:"""''"!''''-:''''"~'''"'''C=:rPr','T1:'':~'',",',",.11,",F--''C'_"1"'m-:r o/f'~~~~'~W"~~~'"~'';''''' ,',' ~""';-~;:~~~~Stre~~!<\T~~!~!:;~:~~;'~"'~"Ei~t;;0'''':'' Name of Applicant: Address: (Street) (City) (State) Telephone: ($1) 7- JJ -3'(; lS Soc. Sec. No,: 1211 d$i3 !i J ~ Height: t::;QII Weight: !2S; Birth: iLl 22/ X Sex: F Age: .', --~,~ ni , -~>,\ 'IB";,,'1\~ I f}, t ~: l70 (Zip) 7~ f l o'i3 Product Dcscription DPF2600(PA)-P.. (3 Plan A (3 Plan B o P2400(PA) ....... (3 Plan A (3 Plan B ~L9 PA)-P.... (3 Plan A 0, Plan B o 93(PA)-P 2/95 OtHER..........., ~ ~\Uiu.- (Plcascindicale Plan) Elimination Daily Bcncfit Period Benefit Period o Plan COPlan 0 I Oays!1 $ rem !!3.~ I ~~ C~:: . '--'':'''.>'' ..... :. Optional Riders o LTINF91-P o P-RPB-5 o 'SBR91-P I3l-15THER C:: D J F'/ " , Lifctimc Inflation Rider Return of Premium Benefit survivorsllt Benetit Rider ~ ~G.-<. Rider Benefits (if applicable) GJ~G;] ,. Premium ;Hf7I $ /~G(; AT} I f},l{ ().<.lD $ $ $ $ <.f ~:;O,C)c) ~red Subtotal $ If." 90, 00 0 Select Less Marital Discount $ I !P '1. rn:; 0 Standard Annual Premium $ IS ).-/. "'-' 0 Policy Fcc $ '2..C~' Total Premium Collected $ ((PC f! Premium Mode 0 ADs 0 Q ~ ACH (When selceting ACH two (2) months premium and a copy of a voided check is needed.) NOTICE: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim contaipingany materially false information or conceals for the purpose of misleading, information'concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects the person to criminal and civil penalties" , p-" 1 OOfPA) L <' ~ - ''"--'''-----~,." .-. ..- ~. ~- _",-,.._,_.,~,.,,"M .~~ . 0" , ! -'_._~----..,........",,~~, , 1I11lill -.......".,,~ 6.,"_ ,- ~ "- ~"'-"- , "~'~"'_C)l~" 'uaJIllJ ~U!aq Anua.!.!nJ SUOHllJ!paW 1111 JS!'1 Do you need or receive assistance or supervision in performing everyday living activities such as walking, transferring, eating, toileting, bathing or dressing? ........, Yes 0 No 2. Are you currently confined in a hospital, long-term care facility or are you , receiving any type of home health care? ........,............,....,.............,.........,........,..,..., Yes 0 No 3, Have you ever been diagnosed with or treated for Alzheimer's Disease, Dementia, Senility or any type of Organic Brain Syndrome or Parkinson's Disease? ..........,..... Yes 0 No 4, Have you ever been diagnosed with or treated for Acquired Immune Deficiency Syndrome (AIDS), Aids Related Complex (ARC), or Human Immunodeficiency Virus (HIV)? ."......,.."".,..,.....".."".....".."..."..,'..,..,..".,.."...,..,.."..".."..,...'....,..,...., Yes 0 No a/ NO'fE: If any of the above questions are answered "Yes", the proposed insured is NOT ELIGIBLE fOI' coverage. S, 'Within the past five (S) years, have you been: /' ..' "a,)Hospitalized orbeen~edically advised to be hospitalized? ....,........,.................. Yes Q;( No 0 .;,:"',\b;),Confined to anursinghome or been medically advised to be confined to a ,!,~i:;'4~r;;,.nlir~illg )lOr;le'?,:,,',:...:,"",...:.,',.,",..,',...,::.,~..,:, ""..".", ..."....:..,..."..", "",...,..,.".. Yes 0 No '~:':;i.~!;:~i,',C):sg~~eive4 home hel!lth care ,or b~en medically advised to receive home health j;V~:~,~!':':li.-~;~<t~~~~a~~?,,_;.~~~;.;_t::'?;:~~:::~~~~[~>::I,;~ ,.': :.:;~~:;~ \~/~. };. '. ~'_ ~~; .'.:~:;:~_~~!~~~:~'~~~~~~.~;,~;J~~~ ~': ~,~ .,. .:. .. . ':-': ~:. _' " . ~ .'~ ,~,~,,~ '_.. . . . . . . . . . . . . . .'. . . .. . . . . . Yes 0 No' ..oy91\IculfelltIY:I,l,~e.o~~aveyou useg, illt~~Pllsttwo (2). years, a cane, walker ...<.!~or \Vheelcl1afr? '.':~,.. :'::::::::,;;"";.",.,,,.. ,....: ,:" ::::,:~.:., ...'""..".." ,..,.."....,..,....,.."",.,.".", Yes 0 No !;'(;;{i(I-lave yOlle'lerhadanappIication for life or health insurance declined, rated, ;:rlir;",~;i;mO'di fied o~ postpqned?'" ,.."..:::, ,.."....,."" ..;, :::: ,..:..........".."......"..".."... ,..."'.'"..',,, Yes (\ "8: ",Have you ever received disability benefitsofany type? ........,................................,.. Yes 0 ~',9,' ' . Do you currentlyrec)lJire or receive assistance with, or havc you in the past lwelve (12) months required or received assistance with, shopping, cleaning, cooking, laundry or transportation?""..,....",.".""""""......".,.",".",.."".",...,.,.,..,..",."..,.,.,., Yes 0 No I 0, Within thc past five (5) years, have you rcceived any medical or surgical advice; examination or treatment for: a,) Cancer, Leukemia or Hodgkin's Disease? .........,..........................,..............,....,.. b,) Stroke, TIA, Epilepsy or Seizures? .................................,......,..........,....,............ c,) Depression, Psychosis or any other Mental, Nervous, Emotional or Brain Disorder? ..,.....'...",.,..""....."'..',...,..'""'.."......,..',..,.,.,,,,..,..,...... ,.......".."""..".., d,) Nephritis, Kidney Failure, Incontinence, Cirrhosis of the Liver or Diabetes? ..... e.) Osteoporosis, Arthritis or any Back, Spine, Bone, Joint or Muscle Disease or Disorder? .,..,..".,..,...."."..,......"..".,..,..,..,...,....."..,..".."..,..".."..,...,.".."...,."...". 'Yes 0 No f,)' Heart Disorder, Hypertension, Cystic Fibrosis, Emphysema or other Lung Disease or Disorder? ............"......,...............,.............,......................................... Yes 0 g.) Drug or AlcoholAbuse? ................,.......................,.............,....,......................... Yes 0 , II, Within the past five (S) years, have you received any medical or surgical advice, examination, or treatment for any health condition not included in the above , medical/health questions? .....,................,......................,......,..,................................., Yes 0 No iJ'" If any question is answered "Yes", please list complete details. Include names, addresses and dates of doctors consulted, hospitalizations and t~eatment, of any form, received, (')e\ - t'?<Y.c" - t{Z>S'\lm\Ul.eP - Gel> ,['J';:.ff. MRD/ w.. C~~ ~ a/ rg/ ctV ~ r/ ~ No No ~ Yes 0 No Yes 0 No ~o ~ No No ~ ~ 0'" ilJ'" Yes 'Yes' 0 No ':.1 e., (~^~xn:r_~~~~ct:~~>~~r* ~.I\.(!L.... - If more space is needed, attach a sheet signed by the applicant a heck this box. 0 (ch~ck only if additional slu..'Ct is submiUcd) -~ --,. -"l~~~ . ~~~ _.~ ~C.~ " c _._~.. I --1IlJ l_,~~....~~~ ,.Medication Condition Dosage' " Medication Condition Dosage ~. Ifmore space is needed, attach a sheet signed by the applicant and check this box; 0 4, tio Do you no~, or didyou within the last twelve (12) months, have another Long-Term Care, Nursmg Home and/or Home Health Care insurancc policy or certificate (including health service contract or hcalth maintenance organization contract) in force? ,,'" ...,..,...,......".,....,..." .",..,....""",'...",."."'.,, "..,..." "."",.,..,..".",.".,..,..,.... Ycs 0 a,) If "Yes", with what company? b,) If the policy has lapsed, when? _/ _/_ Do you intend to rcplace any of your medical or health insurance with this r ') v U" po ICY. '........,......,..,....................'................,..,.........,.........,..,..............,.................... I cs If "Yes", a completcd Rcplacement JI'orm MUST be submittcd with the Application. Are you covered by Medicaid? ........,....,....................,..........................,;..,..........,.... Yes U (If you are eligible or covered by Medicaid, you may not need to purchase the policy since it may provide duplicate benefits.) Agent to list all policies he or she has sold to the applicant inthc last five (5) ye,lrs, (Usc additional signcd shcet irncccssary,); . No ~ 2. 3, No r/ No ty Company Policy/Certificate Number Type of Coverage Effectivc Date or Coverage Currently in Force'! (circle) Yes No Yes No Yes' No Yes' No Yes No If Lapsed Give Datc I havc reviewed the Outline of Coverage and the graphs that compare the benefits and premiums ofthe policy, with and without inflation protection, I realize that, based on current health care cost trends, the benefits provided by a long-tenn care plan which does not have meaningful inflation protection may be significantly diminished in terms of real value to me, depending on the amount of time which elapses between the date I purchase the policy and the date on which I first become eligible to use them, Specifically, I have reviewed the Policy Form and 1 reject inflation protect' n, IF NOT APPLYING FOR INFLATION PROTECTION, APPLICANT MUST SIGN BELOW. ~ <:..- ..iL/ ~/:t2 Date I have fully r ' e e information regarding Inflation Protection with this applicant. ent ...!L. / ~ / .I!.- -Date l . ,..,- ..'--~"'. -,.,-.- - .."'.,- ,--~,.--' -,..-,.., ~ -.-. _.~.' ""'"""-~ .J ~'~~~ ~- "'"'~'1rd"d;:: , . , "-' I?N~~~~.~;'/J)!~~'k ,.,j~iS}~~rit'lrf1!4';~~WI~~:~~~q;K,rom,. \c'fri,'!J;Fi.\.j ~11rrjl~~m,!:W,J~~~~~i;~~tf!i;!,\,<;:~"'I:';'\~'!:1 " ,-"-,-".;I-t,~ I understand that I have the right to designate at least one (1) person other than myself to receive cancellation of this long-term care insurance policy for nonpayment of premium, I understand that notice to my designee will not be given until thirty (30) days after a premium is due and unpaid, o I elect to design,at~ thi~sperson to !ec 've such not, ice, Name: ~I\L S. ;}R. Address: l G -5.:., . ~(\R..<;'A.rJ C,\,. P-1<'Th1\l1 QA. I 9Nl Telephone: (_) o I elect not to designate any person to receive such notice, Signature of Applicant ~/~/rL Date I hereby declare that all statements and answers as recorded herein are full, complete and true, It is unders,tood and agrccd that: a copy ofthis application shall bc attached to and form a part ofthc policy issucd; no insurance hereby J.~pplied f()r shall take ~tl"ect!lnless a policy has be,en dclivered to ~le and, th~ initial term prel}lium is pa~d in full; and If Issued, coverage will ,be m force as of the polIcy date shown m the polIcy. The undersIgned applicant and the agenfstatt;.thatthe applicant has.read or had readJohim/her, the completed application and tliat the applicant 'realizesth.~t~nY mis~lng and/or inaccurate information and/or fraudulent statement in the application may result in Iossof9QYerageuqtierthe,policyF;"',,.,',"".., ' , ',' , ' :lhercby.illlthorize any li<:ensed physician, mcdical practitioner, hospital, clinic, or other medically related facility, jnsurance conipany or its reinsurers, or other organization,institution, or person that has any records or knowledge pffnyself:or my health !o give Penn Treaty, Life Insurance Company, or Its !einsure~,an'y such informati~n in the 'event that Penn Treaty fmds such mformatIon necessary, A photocopy of thiS authOrIzatIon shallbe as valtd as the original.. , ., , , I have read the Outline of Coverage for the policy applied for, If I am age 65 or older, I have also received the "Guide to Health Insurance for People with Medicare" and the required Medicare Disclosure Statement, if applicablc, CAUTION: IF YOUR ANSWERS ON THIS APPLICATION ARE INCORRECT OR UNTRUE, PENN TREATY LIFE INSURANCE COMPANY HAS THE RIGHT TO DENY BENEFITS OR RESCIND YOUR POLICY. Dated: It I I '7?- at I-/()G. (tJ-. ~\:\o('\J~,.\-"'2, s;.. J',-l H<- Signature ot'l\pplicant 4,<:"'/"-10 Agent No. State License LD, No. (if required) , e Did you personally interview t proposed insured/applicant and l"itness his/her signature? es 0 No Was anyone else present? Yes No If yes, who? 3\~, ' Did you observe any physica mental impairments with regard to memory, walking or speaking, or any form oftrernor? 0 Yes No If yes, . la'n., " ' 4, Docs the applicant live alone? 0 Yes If no, with whom does the applicant reside? 9uuJl:. 5, I I' there is a spouse, is he/she applying? - Yes 0 No I~ (" Iflhe spouse is not applyin!l<11lease explain the reason(s), l 7. Type of Dwelling: a;r Private Home 0 Apartment Mobile Home 0 RetirementHome , 0 Nursing Facility 0 Adult Congregate Living Facility 0 Other 8, Did you review the current aceidel11 and health insu~nee coyerage of~he applicant an~ find that additiol' coverage of the type and amount applied for IS appropnate for the applicants needs'! Yes 0 No /' 9, Did you review the current and future financial ~bligatio,n for sustaining the policy? Yes ~o 0, ' 10, Did you review the current ~ange?f cosls ofnursl.ng servIces, home health care <JI1t\ commul1lty based servIces in the area and how the policy bemg marketed WIll cover those costs? Yes I!3"'No 0 I I, Did you review the average u~f services covered by Ihe policy - for example, the average length of stay in a nursing home? Yes liJ-"No 0 and accurately recorded on Ihis application the information supplied by the applicant. ~/ 3:1-1.J2.. Date ""f""--'---.~~:'~",,"---'; . "-.....-....~-""....".,.,.< _. ..,.,~-~~,,"""~""'."" =-~==""".".,~~,-~...."-~-,",.,.- '--'_"'_'_."'T,','"""~""~''''''''-..,r~'''''''' ~. ."'..,,,~" - ~ - , ~ SHERIFF'S RETURN - OUT OF COUNTY C~SE NO: 2000-05935 P ~ COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SCHULTZ DOROTHY Z VS PENN TREATY LIFE INSURANCE CO R. Thomas Kline ~ " -~~' " I N;r~r;1 duly sworn according to law, says, that he made a diligent search and , Sheriff or Deputy Sheriff who being and inquiry for the within named DEFENDANT PENN TREATY LIFE INSURANCE but was unable to locate Them , to wit: COMPANY in his bailiwick. He therefore deputized the sheriff of LEHIGH serve the within COMPLAINT & NOTICE County, Pennsylvania, to On September 15th , 2000 , this office was in receipt of the attached return from LEHIGH Sheriff's Costs: Docketing 18,00 Out of County 9,00 Surcharge 10.00 Dep. Lehigh Co 33.00 .00 70.00 09/15/2000 SCHMIDT, RONCA & KRAMER Sworn and subscribed to before me this 1ft!:- day of .Jrz...L...... d6?J1:::> A . D , C)Y~ro~o?::t~::~~., ~ mas Kline ff of Cumberland County ~..~'- ~ , ,~ . ; .:.il " ~> '" """,~~. In The Court of Common Pleas of Cumberland County, Pennsylvania . , Porothy Z. Schultz, et. al. VS. Insurance, Co. . Penn Treaty Life No. 20-5935 Civil Now, 8/29/00 ,2010(1,1, SHERIFF OF CUMBERLAND COUNTY, PA, do hereby deputize the Sheriff of Lehigh County to execute this Writ, this deputation being made at the request and risk ofthe Plaintiff., // ,:.d'!!', " , , . r~~1! Sheriff of Cumberland County, P A Affidavit of Service Now, ',20_, at o'clock M, served the within upon at by handing to a' copy of the original and made known to the contents thereof, So answers, Sheriff of County, PA Sworn and subscribed before me this _ day of 20 '- COSTS SERVICE MILEAGE AFFIDA VIT $ $ - I i ! i 1 , i I A j :j J \ 'f;',~ . , ~A_ ~,~~.~ M' e J_~: S~r \Lj f~ ,~ " - :!"" ill I' I' '~':;-:ffY :i d , , , ~ C'., ; -~) "jJ r, :;' _"~I '<]"', ,n ",) ~" -- ~~__ ~r'l1: " ,,,,,,~OlIl~Mi~'l'1'~'~_H"!<~",,ll1,,,!;;,,~.;;..;,p-r-~o>>~~'l""~""'il""'''1''''''W'":"i'!IM'Wlr!;i~~~_~ ,""J}I!llI,"~~~:JII '0' "'~_" ' . _"'!Iff -'ni>:I~'~,";"'""""",-=-,<",,,,,,,,,,~,,;,,,"_"*.,,;,,,,,,~c>,,,,,_,.,,,,",,,,,,,,-..._~.III"""~~~I~Qj;i,", - ,IOi!IF'~i~..m.k""",_!\i;""""IlH#,;jM-~)!l~j-G"'.''''h'_.'' SHERIFF OFFICE LEHIGH COUNTY CrnJ~THOUSE 455 W HAMILTON ST !'(UCWI 106 ALLENTOI>iN PI'! IBlOl....:1.61'-1- DCW~OTHY Z" SCHULTZ; ET AL VB DOC#~ 2000-CV-2315 CASE~ 200Q-NC-24-78 EXPIR: 27-Sep-20()O DEPO!3 IT" :":0" 00 ~~NN TREATY LIFE INSURANCE Crn1PANY WRIT , COMPLAINT IN CIVIL ACTION 00,"~:';9:3:~:; (CUI'IBEF:U\ND COUN'IY) SERVE" F'E!~N TFiEI~TY I.. I FE I NEiUI,(I~I~CE CCWIF'I~"~Y AT 3440 LEHIGH ST" ALLENIDWN, PA 18103 PAID 1" N!WIE OF II\IDIVlDUP,L SERVE~::'._~I:~N i~;~_~~.._.....\i~.2.~..~~..._........._..__......_......__..._..,.. 2. h:ELJ.\TIONSHIP TO DEFEI'olDI~NT" C\~Ii.~\- ,0. " DATE, ____1,~.~:_~~~~...__._ ,?~:.:,~.'~::-"'--.'''~~~~:l~~.''.:::~i~:S::~;:;:''''''''-"':::(;;~;~(:;',':::::::::,::': t.;. I.. DCI-\T ION ell' SERV I eE ".-.,...,._.....::-?~~..~........h.~.~~2J...~.._~':b..._.._.... ..,..........." ........._...._......,...,.____......_..,....,_......_.................._....._......_.......,..,_._...._..........,..........._..~\~i~~,2,!::::....,_..............................,..............'.......,..,.....,.............,....,..,.... 5. rn~ABLE TO LOCATE, I NUMBER OF ATTEMPTS TO LOCATE DEFENDANT AT LAST KNOWN ADDRESS, 1 ~ DPITE:: tl. T I E~" D!-\TE ~1. TII'IE ._' ~ D('~) Tt:: g,.; T I !"IE: 'I" DI~'TE & TI 1:;' W~TE: ?" TII'IE I:::. ~ D(~ "fE ~f. TIl'lE ACCEPTANCE OF SERVICE I HEREBY ACQ~PT S8'(VICE OF THE LEGAL PROCESS AS OUTI..INED ON THE FRONT OF TH~ DOCUMENT. THIS SERVICE IS ACCEPTED ON BEHALF OF THE LISTED DEFENDANTISI AND I H~REBY CERTIFY TI~AT I AM AUTHcml~~D TO DO ~J. ______H"_H_._..".___..-"HM_""____._____._~_HH_._._____.___._.___.___~H_'___'_ PRINTED NAME OF ALITHORIZED AGENT SIGiNATU!'(E UF i~UTHUI,(IZED ,<\GENT lJA1~::: TII"IE :: SD AN!3WEF(!3 . SVJC) ;;:N !-\NO SUBseR I BED BEFClFiE I'IE 01\1 .. -~~.._--_. , ~"'~~'-- ,..........'..'........-..., HHUH.___ M , NOTARiAl SEAl SUSAN J. SEDORA, NOTARY PUBliC CITY or ALLENTOWN, LEHIGH COUNTY. PA MY COMMISSION EXPIRES JUNE 25th, 2001 Dol:;:CHHY Z. E,CHULTZ; ET AL i,:." '. _, v,s"._ , ' ' , THtATYLIFE'INSURANCE COJviPANV , '""._ -,'_. "," 'il,. ',.' '_' , , Ii "; Hi' 'SHERIFF OFFICE L.EHI,""C~NTY CDURTHOU"lE 45::;W HAI"iH,:rtlN ST I'{OUM Ib61~U;,ENTqWN PI.;'1,l8~,Ol-l6l'!', > iJ I "':.~' I'''''' ' " .." ;~,:,'". I '!:;.'7" I f I I l ! .,.~' , ':. :, W$Jii., -"'." .,.."\.",, '. ' ,," ': :"" "" ' : "" ' , ,,;.',,";:," ",;: '",: , ,:" " : ,,. -',::" ":; :", ~ ,," .." 80 "iPlc.AIN1I N CI!<t,tL,Ac::t(ON ()O~5:::I,,~f:; ,"'(CUl'1BEf(L,Ai'll), t: IJEir-Ity r .',. " ' PE. N,,'rR";'i~TY,I.SFE",I~ISLJRAI\tCE tOr\r'ANY, :'4' fh I ""H,"""','I' ,"'I" ',',', A' t'EN').,(')W"I'" 10'"' '['o>j;','" ;I. , ~ _I;;;, ,), t,"r :;;:.,,, 1l..R" ~.,. ~ f-,,, \.1. .. '_', DOC:;j:j: ~ E~OOO'-'CV'~"E!':~ J:'::; C(4SE_'~- E.~OOO'-NC'..,E?l,I.78 t:-v6 I'R" 'ow" ;:i"?...~:b_:~'>';"~:6hnf"" 1."",.:1" ,:,' '" ~':, .".. , ',_ii:J'€w !....-':_"L~.~. " ,_~ tfi:::Pt:;}SJ'l;~ '~" :::;:(1 ,,,:i)O f'ENN SE'HVE'): AT " ,RETURN Or SEPVIC;E ,," '.\, 1" NAJ'lE o~, I ND IV IDlI!,l~ 8ERv'~:D ,_..._~:3~b~,~.~..",\1:.9j...~,~b:_..___...,._.....,.._..,..,_...,... 2. r~E~AT I~N;3H;I;"TO DE~'END{.'lN'!f, __....,..L~'~!"c..__.._?: ~EL'()"!:,._....," .,.. '__, ...." ...... .. ..." ........... ___ , ,t"",,,. .Re;l;;E~1t~1-J,3 .:~~~J)€{) " TII'lf.,' '1>: bS-r--~ , HOURS:: :. I~. ~,i;;;;IH1\i}N .:~~ ~::'A~1C~-":" '~44 D' t.:i ~~.~'~ 3'~~~""-'''' -. ........ '... l I '" -,....-, -_ H H ~~, ~__m._ - .~.'......_~_ ,.........w._, ~___~'H~ ~.~_ _ "~"~. . __",,_ _ ~ ,....._.. _ "_~H "_~_ ." ~ _~" .""" _'K""~ ,__. .', ".""'\ .. ',' ' t~\\ ~ ,'. ....""L;;.:.._...........i..,'._......,.,......,........._..:.:.....,......,_,.............,__.....,..:__.."..~"....c__ "'1Z2,D.c,.:.._,w.~.......~,,,..,............,....,........ ..........................,..........,........,.........,.. Tr" -"" ,. -t,,_,,")'''I' ,\ f 5. UNABL.EiTO LOCATE,' t ' ( ) iNUMBEF( ,OF I"TTEI'1PTS TO LOCATE DEFEKIl::JANT, AT U,,8T I<NONN '~IDDJ-,ESGt i' , ,", "., , , 1. DATti: ~ Tl~E...,..~....'"",.._,....,.~.,:......:.:._;..,~'--.:.:........,~.\2:,trA'tlit.t,TH1Es<'1;L.. ,,1. ('" " " ,',. '! ' . ," ,.':' ':,'!,:' ~\.::. " F-:~;;r:7-- ,,',W:._..M....__""" ~~"~~.,,~........ .....,__..K_........._, <3. .tJAri:t" 14" D/4rTE~l\c .1ME'/// , q ~~:,.. ,Il\"""'1'~......._K_______._.._'",.._.~.___.'<"_'~K_ I: Ii': "....... ,r .1''/ I', . . .>,V< ':.r:..!~ )-,r I/;,/ ' ::'" D("T~:' & ..__.__~.~,.__.._.._.~.. ._...._, (l':1'iil~';'t: '1<iI,e; ''!:J~,...._._....,.._........".._..._.,.. ..,_ ,_,,,,,"' ..........,... i - P<<:"'7 - ....--t:~- ..~ ,'I ?ICCEF'TANCE OF, L..,.;,t~ " " '__.. I ~ , f HER!':BY fi\CCEPT SEFN I CE OF THE LEGAL r;tROC~,.S AEi OUTLI l'lEo ON THE. FRI.lj'J'i 010 THE' DOCtfME:Nt" 'THIS SEf'{VICE 18 ACCEPTED Ol\d)3Sl'1ALFOF: THE LISTED DEr"EN[lr:'\NT is) rIND I'~,\oo,,' ' - ',,' ~,.....- I HEf-U,:BY C:ERT IFY THIH I ?\M AUTHOR LZEt) TO DO SO" ! ' -, .."",~-",, ~ __~"'"_H_._._""__~"___ri,,_...,__.,_..~__..___..___"'___...____."_~."......_~..,_,_... PRINTED N?\ME OF' I,UTHOF(IZED {",[,ENT , ""10,"-- 't.lATEt"" ------~o--:":,~=~-~-:-==-_ " -,~. . -< s"i:Eii~AcT.Li~<fE'(:;:ff.Au!HOFlI:2E:::i:j...Ac,.I~NJ.., .:, _ ,~,"_"M ,_ ,e~~~~~'r ME ON ",1' "'''~''".'''''''''' ',' ';'~' ":".:"':,.,.' ",',,', , ,w:~.:" ;:::-,1;:~ ':-~~~>~, "t,,::; __, : H' r,:, .:,~-:j,;\,:,;:.~: :':~?'~" :.-~:i~;':':~.:'.,'_:: "',:~;::':, ,::~.\~;':,:,,_';~~:,~'t,: '", .:,:'_.'~:>-: '", __,;, ~1.J..:;i,~~~; ,'':''';:,', '" ,",' "~~,'""":~-""'.." ~i~,'~.'.-~'~""~\.":..--:' ","i' ';1:("'" ':';'/)J'~:' ":",,, ;C:":::',,'_'. :,,' ",:,,', ,-'-'_ '-'" '; fii'::>~,:)'::~{:;c J ";,~:,,::;;\i,~ 'J ' , ,.,',. 'i:" , , '" . !,,;, L---:. " , ;;".\:"''''>'10.''''';'',; :,_ "",',",,'i':'~ ~~~"",,,-\:._^~,C'.'" .', "",."..~ . ,,<- " ".;j",,~.~,":: j "--', .=.~",' ,- ',' ... ~ -';F . ~_,_ ,,,,;, if< -'0' - -~-v , - <' ,",-,_,_C 'w '_',,-_" ,,<,"_'-"'U'___.c.' - -~ d, '_"',N_;' '"v,,"',,-,,--- ~>':"'",__- __'., coo,,, :, -;. ~;"';" POST & SCHELL, P.C. BY: RICHARD 1. MCMONIGLE, JR. LD. # 33565 1800 JFK BOULEVARD, 19TH FLOOR PHILADELPHIA, PA 19103 (215) 587-1000 Attorneys for Defendant Attorney for Penn Treaty Network America Insurance Company, Successor-in-interest to Penn Treaty Life Insurance Company DOROTHY Z. SCHULTZ, by her Attorney-in-Fact, GLENN E. SCHULTZ Plaintiffs, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 00-5935 PENN TREATY LIFE INSURANCE COMPANY CIVIL ACTION - LAW Defendant. ANSWER OF PENN TREATY NETWORK AMERICA INSURANCE COMPANY, SUCCESSOR-IN-INTEREST TO PENN TREATY LIFE INSURANCE COMPANY, TO PLAINTIFFS' COMPLAINT WITH NEW MATTER AND COUNTERCLAIM FOR DECLARATORY RELIEF SEEKING RESCISSION AND RESTITUTION Penn Treaty Network America Insurance Company, successor-in-interest to Penn Treaty Life Insurance Company (collectively referred to here as "Penn Treaty"), by and through its counsel, Post & Schell, P .C., hereby responds to plaintiffs' Complaint as follows: I. PARTIES 1. Admitted, upon information and belief. 2. Admitted, upon information and belief. 3. Admitted. 4. Admitted. 5. Admitted. '" - ","0-"-,' -",;;,,:;-'.",,': ~ ';';:'J -,_"~_ __. """ 'oJ_, " ,.,;_,-_'o,,___~." "___:'_'",-' .--.';,idii 6. Admitted. II. BACKGROUND 7. Admitted. 8. After reasonable investigation, defendant is without knowledge or information sufficient to allow it to admit or deny the averments of this paragraph. 9. Admitted. 10. It is admitted that this averment accurately quotes selected portions of page 4 of the applicable insurance policy. 11. Admitted, although the maximum period of benefit is specifically set at 1095 days. 12. Admitted. 13. Admitted. 14. It is admitted that the quoted information was set forth in the designated box on the application form; Penn Treaty is without knowledge or information as to who actually wrote the information. 15. Denied. Not all the information provided by plaintiffs to Penn Treaty in the medical information section of its application was true, correct and accurate on November 21,1997. 16. It is admitted that plaintiff had a history of memory loss which was undisclosed on her application for insurance. This memory impairment appears to have started as a result of a motor vehicle accident in 1983. As to when the memory impairment started to worsen, after reasonable investigation, Penn Treaty is without knowledge or information sufficient to allow it to admit or deny the averments ofthis paragraph. 17. Admitted. 2 - ,--, -~- .-, - . ',-'.- ',"",.-- - - - "~ '-';"-' ~" -- '," ii.. __,,__' , - < >,:~: 18. It is admitted that Dr. Eslinger performed an initial evaluation and referred the plaintiff to Robert Brennan, M.D. for further medical and neurological evaluation. 19. Admitted. 20. Admitted. 21. Admitted. 22. Denied as stated. It is admitted that these averments are contained in a letter from Dr. Paul J. Eslinger to attorney Charles E. Schmidt, Jr. and submitted to Penn Treaty on or about February 10, 2000. 23. After reasonable investigation, Penn Treaty is without knowledge or information sufficient to allow it to admit or deny the averments of this paragraph. 24. Admitted in part; denied in part. It is admitted that medical records of Dr. Martin, Dr. Brennan, Hershey Medical Center and Geisinger Medical Center created prior to the date of the application, November 21, 1997, were obtainable by Penn Treaty after the application was submitted by plaintiff; it is denied that "all. . . information referred to in the preceding paragraphs was readily obtainable and available to Penn Treaty" at the time of the application, since some of the records referred to in plaintiffs' complaint were created after the date of application. 25. Admitted. 26. Denied as stated. Dr. Reichwein's impression as reported in his December 15, 1998 letter to Dr. Creston Herold was as follows: IMPRESSION: Chronic cognitive dysfunction/short-term memory loss, secondary to prior closed head injury and subsequent right frontal hemorrhagic stroke SIP colloid cyst re-section. She also has a secondary seizure disorder. With regard to her more recently slowly progressive cognitive 3 ',,-- .-'-,,-,'.""- - ,-, '-';;~""'-'C)_: ,y ;""""'.: __ ",,";",,, , --- --',-,-,,-_ , ' ,;-,.,;;:: dysfunction/memory loss, she probably has a superimposed dementia (?etiology, ?Alzheimer's disease). I would also question whether she could be having paroxysmal subclinical seizures. Lastly I would also question whether the event 9/98 represented a TIA, however based on the reported examinations at that time; this was felt to be unlikely. She currently has no focal deficits. 27. Admitted. 28. Admitted. 29. It is admitted that at the time of the application of April 22, 1999, Penn Treaty was in position to request medical records pertaining to plaintiff from Dr. Martin, Dr. Brennan, Dr. Reichwein, Geisinger Medical Center, Hershey Medical Center and Paul 1. Eslinger, Ph.D. 30. Admitted in part, denied in part. It is admitted that as of April 22, 1999, all premiums had been paid under the subject contract of insurance with Penn Treaty. The remainder ofthis averment is denied for reasons set forth in Penn Treaty's New Matter and Counterclaim. 31. Denied. Penn Treaty first made inquiry into plaintiffs personal history, which would include her neurological history, at the time of plaintiffs application for insurance and in a follow-up personal history interview with plaintiff which occurred on or about December 19, 1997. 32. Denied as stated. On April 29, 1999, Penn Treaty sent a letter to plaintiffs attending physician, Creston Herold, Jr., requesting his office records. 33. Admitted. 34. Denied. The file was referred to Kathy McLaughlin, Claims Manager, on June 4, 1999 for review. 35. Admitted. 4 . . ,,' ",'^ -'" ''; -".-i..'~". , ,__, '."'L;-', ;"',' ~:'-_"<"_ __ ~'~..G~j 36. Denied as stated. It is admitted that on or about October 8, 1999, David Morgan, the son-in-law of the plaintiff, filed an insurance complaint form with the Pennsylvania Department of Insurance. 37. Denied as stated. The letter from the Penn Treaty, written by Bettie 1. Beck of the Claims Department, stated as follows: We have received a reply from the medical doctor reviewing Ms. Schultz's medical records and completed our review of this claim. Medical records from Dr. Herold reveal that Mrs. Schultz's cognitive problems were documented and treated as far back as June of 1994. Unfortunately this condition was not mentioned on our application for insurance signed November 21, 1997, nor during her personal history interview done by phone December 19, 1997. Please refer to the policy, page 9, "Time Limit on Certain Defenses," #1, which states material misstatements may be used to void this policy. There is no doubt that had your wife's complete medical history been provided at the time of application no policy would have been issued. Although we certainly have grounds to rescind this policy and return the premium paid, as a good faith effort in settling this claim, we are willing to compromise and extend an offer to pay the expense incurred up to $100 per day for a maximum of three-hundred and sixty-five (365) days of facility care. The policy would be null and void thereafter. If this is acceptable to you and Mrs. Schultz, please return a copy of this letter indicating you are accepting our offer and the appropriate release will be forwarded for your signatures. Payment of benefits would commence upon receipt of the fully executed release. If we do not hear from you within thirty (30) days this offer will expire and we will proceed with rescinding the policy. 5 '--"- ",,'.,--'---'.- -'''';:",;'.'. '"" - - ",c','_-,,: ;,,,__,,c:: i'".~,:, ;;;.,,>.- c-- ,"", --'''''';KJI If you have any questions regarding this offer, please do not hesitate to contact me at (800) 222-3469, ext. 3175. 38. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. 39. Admitted. 40. Denied. Dr. Eslinger's report of January 28, 2000 is a writing which speaks for itself. 41. After reasonable investigation, Penn Treaty is without knowledge or information sufficient to allow it to admit or deny the averments of this paragraph. 42. Admitted. 43. Denied as stated. The letter dated April 10, 2000, from Bettie J. Beck of the Penn Treaty Claims Department to attorney Charles E. Schmidt, stated in part as follows: Thank you both for your and Ms. Schultz's patience in allowing us to obtain a legal opinion regarding this claim. Although our attorney has advised us that there is a good faith basis to seek recision based on medical information that was not provided at the time of application, we have decided it is in everyone's best interest to avoid costly and time-consuming litigation. Therefore, we will proceed in issuing payment for Ms. Schultz's care to date. I will forward this file to our claims department for processing and a check will be issued this week. 6 -- < c.' , ",'" -""" Po' ~ " _'_'' ._;_, "0"'- ,'.__"'__"-';0 ,:.".- '_d "'""", COUNT I - BAD FAITH 44. Penn Treaty incorporates all of the above averments and denials as if set forth at length herein. 45. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. 46. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. 47. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. WHEREFORE, Penn Treaty Penn Treaty Network America Insurance Company respectfully requests that plaintiffs' complaint be denied and that judgment be entered in Penn Treaty's favor together with costs, interest and attorney's fees. COUNT II - VIOLATION OF THE UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW 48. Penn Treaty incorporates all of the above averments and denials as if set forth at length herein. 49. Admitted. 50. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. 51. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. 7 '.O'~ "-~ -- ..""-.,.,,~,~-- ,"'" ",-'--' ,,',,';'-..'" " ".--.<-.~ \,.",/ . '~ ~,,--" 52. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. WHEREFORE, Defendant Penn Treaty Network America Insurance Company respectfully requests that plaintiffs' complaint be denied and that judgment be entered in Penn Treaty's favor together with costs, interest and attorney's fees. COUNT m [INCORRECTLY DESIGNATED AS COUNT II IN COMPLAINT] - DECEIT 53. Penn Treaty incorporates all of the above averments and denials as if set forth at length herein. 54. This averment is denied for the reasons set forth in the accompanying New Matter and Counterclaim. 55. Admitted in part, denied in part. Penn Treaty denies making representation as set forth in this averment; however Penn Treaty acknowledges that it is required to act in good faith and deal fairly with any policyholder under Pennsylvania law. 56. Denied. At no time did Penn Treaty make materially false and misleading representations to the plaintiffs, nor did Penn Treaty act in a pretextual manner in connection with handling plaintiffs claim. 57. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. 58. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. 8 ^_ ono _",,_. ,- ^ -"~'boO", ,~,_;__' 0'>;_ __ '_cl; i~___ ""_"""_"<' <,-_' _" ~ c-' ,i'..;,;'",-< "'~-;" ,~ "''-''',';--' -- ,,;.:-;;,' 59. Denied. This paragraph is denied as a conclusion of law to which no response is required under the rules. WHEREFORE, Defendant Penn Treaty Network America Insurance Company respectfully requests that plaintiffs' complaint be denied and that judgment be entered in Penn Treaty's favor together with costs, interest and attorney's fees. NEW MATTER 60. Penn Treaty incorporates all of the above averments and denials as if set forth at length herein. 61. With the filing of this Answer, New Matter and Counterclaim for Declaratory Judgment relief, defendant Penn Treaty has served upon counsel for the plaintiffs a true and correct copy of the Penn Treaty underwriting file pertaining to Mrs. Schultz's claim. To the extent the following factual averments of this New Matter are based upon this underwriting file, specific page references to this file will be parenthetically noted as "PT-U " 62. With the filing of this Answer, New Matter and Counterclaim for Declaratory Judgment relief, defendant Penn Treaty has served upon counsel for the plaintiffs a true and correct copy of the Penn Treaty claim file pertaining to Mrs. Schultz's claim. To the extent the following factual averments of this New Matter are based upon this claim file, specific page references to this file will be parenthetically noted as "PT -CL " 63. On or about November 21, 1997, plaintiff applied for a Qualified Long Term Care Insurance Policy with Penn Treaty. (pTU02-05). 9 -,,--,,'., ','.--.' -, -- ,-,---=--y-.,',- " ,'",,',,- i.<~__ ' , 'C'," c- ~ ,'__'.__ .,Co:; ..,;:,_ ~ ,~_^ __ "'-'tfl 64. Under Part IV of this application, entitled "Medical Information", plaintiff was asked the following question: 1. Do you need or receive assistance or supervision in performing everyday living activities such as walking, transferring, eating, twiddling, bathing or dressing? Plaintiff answered "no" to question 1. 65. Under Part IV of this application, entitled "Medical Information", plaintiff was asked the following question: 3. Have you ever been diagnosed with or treated for Alzheimer's Disease, Dementia, Senility or any type of Organic Brain Syndrome or Parkinson's Disease? Plaintiff answered "no" to question 3. 66. The application provided the following note with respect to the above questions 1 and 3: "NOTE: If any of the above questions are answered 'yes', the proposed insured is NOT ELIGIBLE for coverage." (PT-U03) 67. Under Part IV of this application, entitled "Medical Information", plaintiff was asked the following question: 7. Have you had an application for life or health insurance declined, rated, modified, or postponed? Plaintiff answered "no" to question 7. 68. Under Part IV of this application, entitled "Medical Information", plaintiff was asked the following question: 9. Do you currently require or receive assistance with, or have you in the past twelve (12) months required or 10 .., ,>------:<-~-~~- .--- '* , ... ~ -c, " >". ,;' jC<~,: received assistance with, shopping, cleaning, cooking, laundry or transportation? Plaintiff answered "no" to question 9. 69. The application for insurance in Part IX entitled "Acknowledgment and Release of Medical Information" provides in part as follows: I hereby declare that all statements and answers as recorded herein are full, complete and true. It is understood and agreed that a copy of this application shall be attached to and form a part of the policy issued; no insurance hereby applied for shall take effect unless a policy has been delivered to me and the initial term premium is paid in full; and if issued, coverage will be in force as of the policy date shown in the policy. The undersigned applicant and the agent state that the applicant has read or had read to himlher, the completed application and the applicant realizes that any missing and/or inaccurate information and/or fraudulent statements in the application may result in loss of coverage under the policy. ... CAUTION: IF YOUR ANSWERS ON THIS APPLICATION ARE INCORRECT OR UNTRUE, PENN TREATY LIFE INSURANCE COMPANY HAS THE RIGHT TO DENY BENEFITS OR RESCIND YOUR POLICY. (PT-U 05). 70. The application for insurance, containing the above questions, answers and acknowledgment, was signed on or about November 21, 1997 by plaintiff Dorothy Schultz and her insurance agent, Calvin Ritter. (PT -U 05). 71. On or about December 19, 1997 plaintiff Dorothy Schultz was interviewed by a representative of Penn Treaty, and the answers were taken down in a "Personal History Interview Form" (pT-U 06-07). 11 ," ~ . ",d' -~ -- . " ,.. ,-, ',"',--, "" ~-"" "" :-', , ' .:"~-:,--,, --~. ,,~---.-, ;'';,q,; 72. In this personal history interview, the following questions were asked by Penn Treaty's representative, and the following answers were given by plaintiff: 5. Do you need assistance with shopping, preparing meals, bathing or dressing? [Answer:] No. 11. Have you ever consulted your doctor about memory loss or confusion? [Answer:] No. (pT-U06-07). 73. As a result of the representations made by the plaintiff in her application for insurance and during the personal history interview, Penn Treaty issued Qualified Long-term Insurance Policy No. P450446, effective November 21, 1996, a copy of which was attached to plaintiffs' complaint. The front page of this insurance policy contained the following language: CAUTION: THE ISSUANCE OF THIS LONG-TERM CARE POLICY IS BASED UPON YOUR RESPONSES TO THE QUESTIONS ON YOUR APPLICATION. A COPY OF YOUR APPLICATION IS ATTACHED. IF YOUR ANSWERS ARE INCORRECT OR UNTRUE, WE HA VE THE RIGHT TO DENY BENEFITS OR RESCIND YOUR POLICY. THE BEST TIME TO CLEAR UP ANY QUESTIONS IS NOW, BEFORE A CLAIM ARISES! IF, FOR ANY REASON, ANY OF YOUR ANSWERS ARE INCORRECT, CONTACT US AT OUR HOME OFFICE. OUR ADDRESS IS 3440 LEHIGH STREET, P.O. BOX 7066, ALLENTOWN, PA, 18105-7066. 74. On or about March 29, 1999, Glenn E. Schultz, acting as attorney-in-fact for Dorothy Schultz, submitted a claim to Penn Treaty. (PT-CL 1) 75. As part of its investigation of plaintiffs' claim, Penn Treaty requested, pursuant to authorization, medical records from Dr. Creston Herold, Dr. Robert Brennan, Dr. J. Scott Martin and 12 Cod" "'~ -- '0,___ .' __or. "" '-j .,- ,--en,-, - ,~,~ ,,-- .'.,,',', Dr. Paul Eslinger. These records were received by Penn Treaty over a period oftime that sparmed from late May until mid-October 1999. 76. The medical records which were submitted by Dorothy Schultz' health care providers revealed that Mrs. Schultz suffered from a cognitive impairmentldementialsenility/Alzheimer's- related disease with symptoms being traced back to a 1983 motor vehicle accident. The medical records further reflected that Mrs. Schultz had experienced memory impairment, confusion and disorientation since 1983, becoming worse after 1993, for which she had sought medical advice and treatment, and which caused her difficulty with everyday living activities necessitating reliance upon her husband and others. 77. On or about October 15, 1999, Penn Treaty received a written opinion from Dr. Maria Dennison concerning the claim brought by plaintiff Mrs. Schultz. In this report, Dr. Dennison noted in part that "a review of the medical records at the time of the claim. . . indicated a more substantial adverse history prior to application that was not disclosed to the company." (PT-CL 198-199). 78. As a result of the information contained in the medical records, Penn Treaty concluded that Mrs. Schultz had made material misrepresentations in connection with her application for insurance in November 1997, and that the company was entitled to rescind the policy of insurance. 79. On October 19, 1999, Bertie 1. Beck of the Penn Treaty Claims Department wrote a letter to plaintiff Glenn E. Schultz, quoted in paragraph 37 above. In this letter, Penn Treaty set forth its intention to rescind the applicable policy and return premiums paid to date, but, in a good faith effort to effect a compromise of the dispute, the company extended an offer to pay one year's worth of benefits in return for a release, after which the policy would be null and void. (PT -CL 268). 13 - . ~'. . "'~ :""';>0 ,-~ -.'.',- >'" .- ,,__> " '1~ "~-'''.,,. __. --"..:,,,;,, 80. On or about October 20, 1999, Penn Treaty spoke with a representative of Blue Cross Insurance Company's Long Term Care Division. In this conversation, the Blue Cross representative indicated that Blue Cross had received an application for insurance from plaintiff Dorothy Schultz on or about September 30, 1997, and that Blue Cross had rejected that application on or about November 14, 1997. (PT-CL 238). 81. In response to its letter of October 19, 1999, Penn Treaty received a letter dated November 23, 1999 from attorney Charles E. Schmidt, Jr., representing plaintiffs. In this letter, attorney Schmidt requested until January 15,2000 in which to respond to the offer of compromise which had been made by Penn Treaty. (pT-CL 240). 82. By letter dated November 29, 1999, Penn Treaty granted that extension. (PT-CL 241). 83. On or about January 24, 2000, after the January 15th deadline, attorney Schmidt wrote to Penn Treaty advising that "I will not be able to provide you with a response to your statement of settlement until I have heard from the treating neuropsychologist," and further stating that such report was expected within "the next couple of weeks. " (pT-CL 242). 84. On February 10,2000, attorney Schmidt wrote to Penn Treaty and enclosed a medical report dated January 28, 2000 from Dr. Paul 1. Eslinger, Clinical Neuropsychologist. (pT-CL 243- 250). 85. In the letter, attorney Schmidt made the following compromiselsettlement demand: On behalf of Ms. Schultz, I am making a demand that you reimburse Mr. & Mrs. Schultz for the cost of Ms. Schultz's care to date, up to the limits of your policy; and secondly, promise to continue payments into the future until the coverage is exhausted, or Ms. Schultz sufficiently improves 14 p,' ~ <, - ,,'" ',A _" ..--~ U"v ,_",__"~< ';"'-'--- "' ,'c,__,:,;.- "';',i"'{~"f to be removed from the nursing home. This offer of settlement will remain open for a period of thirty (30) days from the date of this letter. (PT-CL 243). 86. On March 6, 2000, Bettie 1. Beck of the Penn Treaty Claims Department wrote to attorney Schmidt requesting an additional thirty (30) days in which to respond to his compromiselsettlement demand. In the letter, she indicated that Penn Treaty had determined "to fOll'Ward this file to our counsel in Harrisburg for a legal opinion on how to proceed in this matter." (PT-CL 251). 87. On March 28,2000, attorney Timothy J. McMahon wrote an opinion letter to Penn Treaty concerning the claim presented by plaintiffs. (pT -CL 257-261). A true and correct copy of this opinion letter is attached hereto as Exhibit "A". In this letter, attorney McMahon provided the following legal opinions: ( a) the contractual time limitations on the right to rescind did not preclude a recision of the subject policy; and (b) Penn Treaty had a good faith basis to seek recision of the contract by virtue of the misrepresentations made prior to the issuance of the policy. (PT-CL 257-261). 88. Upon receipt of the legal opinion of attorney McMahon stating that the company would have a reasonable basis to deny plaintiffs' claim and rescind the policy, Penn Treaty determined that the costs and difficulties attendant with litigation could exceed the benefits payable and therefore the company would pay plaintiffs' claim. (PT-CL 271). 15 . --~ ~ " '. -- ~ ~'- ",', ' ,- ,'-'",;;' " j-.' '",-!-,,,,.;'~,,--c~- _~"' ',"""-:;-\;;.i 89. On April 10, 2000, Bertie J. Beck of the Claims Department wrote to attorney Schmidt as follows; Thank you for both your and the Schultz's patience in allowing us to obtain a legal opinion regarding this claim. Although our attorney has advised us that there is a good faith basis to seek recision based on medical information that was not provided at the time of application, we have decided it is in everyone's best interest to avoid costly and time-consuming litigation. Therefore, we will proceed in issuing payment for Ms. Schultz's care to date. I will forward this file to our Claim's Department [sic] for processing and a check will be issued this week. (pT-CL 268). 90. Thereafter, Penn Treaty paid, and has continued to pay, full benefits to plaintiffs under the applicable policy. 91. In view of the foregoing, plaintiffs' claims under Counts I, II and III of the Complaint are without merit, because, at all times pertinent hereto, defendant Penn Treaty acted in good faith with respect to plaintiffs' insurance policy and claim, and in particular acted in good faith by (a) informing plaintiffs and their broker at the time of application and where the policy was issued that if information provided was incorrect or untrue, Penn Treaty reserved the right to deny benefits or rescind the policy; (b) communicating in a timely manner with plaintiffs and/or their counsel during the claim handling; (c) reasonably requesting and reviewing plaintiff Dorothy Schultz's medical records as part of its claims investigation; (d) reasonably relying upon the medical opmlOns contained in the records of plaintiff Dorothy Schultz; 16 -"'- ,~ "-0 ;_-' " -'''''0' -,..,,-,,-;-,:' -- -",,/~,,-- '>'.] , ,~~"~ (e) reasonably relying upon the opinion of Dr. Maria Dennison; (t) reasonably relying upon the legal advice and opinion of attorney Timothy 1. McMahon; and (g) reasonably offering to compromise the disputed claim and the company's entitlement to rescind the applicable policy by letters dated October 19, 1999 and April 1 0, 2000, referred to above. 92. Plaintiffs' complaint fails to state a cause of action upon which relief can be granted. 93. The claims against Penn Treaty are barred in whole or in part by the doctrines of waiver and estoppel. 94. Under Section 42 Pa. C.S.A. ~8374, plaintiffs are not entitled to ajury determination as to the issues of the existence of bad faith; the entitlement to punitive damages; the entitlement to attorney's fees; and the entitlement to costs and interests. 95. Any award of punitive damages, as requested in plaintiffs' complaint, would be unconstitutional under the circumstances and barred by the applicable provisions of either the U.S. Constitution or the Pennsylvania Constitution. 96. Plaintiff has failed to state a cause of action under the Pennsylvania Unfair Trade Practices and Consumer Protection Law. 97. The plaintiff has failed to state a claim for punitive damages under 42 Pa. C.S.A. 98371 because defendant's conduct was not outrageous, with evil intent and/or malicious. 98. Plaintiffs' claim for benefits was barred and/or limited by the Pre-existing Conditions Limitation and/or other policy terms and conditions. 17 , c' .,,~ ,-, "' - ';,,- ,,- -" ^ -- '.-- 0';'''__1."'''''__ ,c, " ~-,_"_"""",:__~,, -"-,,, , __~ .' '" ,~;,d WHEREFORE, Defendant Penn Treaty Network America Insurance Company respectfully requests that plaintiffs' complaint be denied and that judgment be entered in Penn Treaty's favor together with costs, interest and attorney's fees. COUNTERCLAIM SEEKING RESCISSION OF THE APPLICABLE INSURANCE POLICY AND RESTITUTION OF BENEFITS PAID 99. Penn Treaty incorporates all of the above averments and denials as if set forth at length herein. 100. Penn Treaty issued the subject insurance policy to the Schultzes as a result of the answers of plaintiff Dorothy Schultz to questions asked on the insurance application and during the personal history interview. 10 1. Although, afterreceipt ofthe medical records of plaintiff Dorothy Schultz during the claims investigation process, Penn Treaty believed it was entitled to seek recision of the applicable contract, it refrained from doing so, instead electing to make the offers of compromise contained in the letters dated October 19, 1999 and April 10, 2000, referred to above. 102. Given the unfortunate decision by plaintiffs and/or their attorney to reject the positions taken by Penn Treaty, the company reluctantly files the instant Counterclaim seeking recision of the policy of insurance issued to plaintiff Dorothy Schultz and restitution of benefits paid. During the pendency of this action before the Court of Common Pleas, Penn Treaty will continue to make payment of benefits to plaintiffs under the terms and conditions of the applicable policy, subject to a reservation of rights, of which this pleading serves notice, that Penn Treaty is seeking rescission and restitution as set forth herein. 18 ~" "" .'- "-'-~--,.'-'< -"'; -"-, --,:'-.-<-" 103. As set forth specifically above, in the insurance application of November 21, 1997 and in the personal history interview of December 19, 1997, defendant Penn Treaty believes and therefore avers that plaintiffs made intentional and material false representations concerning the present health, medical history, and insurance history of Mrs. Schultz with the intent to deceive Penn Treaty, and with a view toward inducing Penn Treaty to issue a policy of Qualified Long-Term Care Insurance, which it did. 104. Penn Treaty would not have accepted the risk of issuing the policy in question to plaintiff Dorothy Schultz and/or would not have provided the terms included in the policy, and/or would not have charged the premium that it did for the policy had Penn Treaty been aware of plaintiffs' misrepresentations at the time. 105. Penn Treaty believes and therefore avers that the plaintiffs did not act in good faith in submitting the above-mentioned application for insurance, in responding to the questions during the personal history interview, and in submitting the claim to Penn Treaty. 106. Because of the misrepresentations contained in the application and follow-up questions, the Penn Treaty policy is void ab initio. Wherefore, Defendant Penn Treaty demands judgment pursuant to the declaratory judgment act as follows: (a) declaring that the policy of Qualified Long Term Care Insurance issued to plaintiff Dorothy Schultz is null and void; (b) declaring that Penn Treaty is not obligated to provide benefits to plaintiff Dorothy Schultz for the claimed loss in question; 19 -,~~~ _.- ,~ ~ f" L..J ~.~.i",,_~ " VER'FI(,4.'fIO~ A.J. C.rden he~by 'Verifl"" that he is the Executive Vice President for Pel1ll Network America Insurance Company in the within action and verifies that the statements made in the roreaoing Answer and New Maner and COlJ/l1erolaitn of defendanr, Penn T~ty Life Insurllllcc Company in response to plalruilfs' Complaint, arc tnJe and COtrect to the bc~t of his knowiedlfe, infonution and belief. The Undersigned understand that rhe statements therein are made subject to penaltjes of I B Pa.C,S. ~4904 relating to l!WWOlll falsification to authoritles. A.~~J- nA TED; dc.+: /;;., ;;;.~<?O CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Answer to Plaintiffs' Complaint with New Matter and Counterclaim for Declaratory Relief has been served via first class mail on October 13 ,2000 upon the following person(s): Charles E. Schmidt., Jr., Esquire SCHMIDT, RONCA & KRAMER, P.C. 209 State Street Harrisburg, PA 17101 RICHARD L. McMONIGLE, JR., ESQ. Attorney for Penn Treaty Network America Insurance Company, successor-in-interest to Penn Treaty Life Insurance Company 22 ".iMb<"""'. ':> ,,~.~~ ~,,~,' u, ". u. ':"', ,- (} .-_J .' . m~ i..)' - , ~.,) <D ':1 ,. ! () -'1 " --:1 j-i ) " ."i ~"'> =< it -.: " POST & SCHELL, P.C. BY: RICHARD L. MCMONIGLE, JR. !.D. # 33565 1800 JFK BOULEVARD, 19TH FLOOR PHILADELPHIA, PA 19103 (215) 587-1000 Attorneys for Defendant Attorney for Penn Treaty Network America Insurance Company, ~uccessor-in-interest to Penn Treaty IIJfeiiiSuTiince-Company DOROTHY Z. SCHULTZ, by her Attorney-in-Fact, GLENN E. SCHULTZ Plaintiffs, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 00-5935 PENN TREATY LIFE INSURANCE COMPANY CIVIL ACTION - LAW Defendant. STIPULATION TO DISMISS WITH PREJUDICE PLAINTIFFS DOROTHY Z. SCHULTZ AND GLENN E. SCHULTZ'S COMPLAINT AND DEFENDANT PENN TREATY LIFE INSURANCE COMPANY'S COUNTERCLAIM FOR DECLARATORY RELIEF It is hereby stipulated by and between the undersigned counsel that all claims which were made or could have been made in the matter of Dorothy Z. Schultz, by her Attorney-in-Fact, Glenn E. Schultz v. Penn Treaty Life Insurance Company, No. 00-5935, Court of Common Pleas, Cumberland County, Pennsylvania including, but not limited to, claims pursuant to 42 Pa. C.S.A. S8371 for bad faith, are dismissed with prejudice. It is therefore stipulated by and between the undersigned counsel that Plaintiffs Complaint and Defendant's Counterclaim for Declaratory Relief - ~ '. - ',> " - ,-;'-<~,~;.o:,,;'"'''' -_' , "," ;-, ~-~--; - ,;<'",- - ~"","';i; Seeking Rescission and Restitution are dismissed with prejudice. R,P.C. POST & SCHELL, P.c. BY "\ p~?~~,~ RICHARD L. McMONIGL , :Ql., ESQ. Attorney for Defendant APPROVED: BY THE COURT: J. ""I,,,,, ",',' " ~.,. i;;'~~klJ """"'':'':'-:;''lbJ(<^ "',"....... ~ \', , .~ ,," n C' il~Li-: L.., :?': 1 UJ. ~ ~~C} 'l>G ""::., ::t . ,~,' ."" . , , "Tl -." td -. C'.:1 ',', ,~ ("J 1.:; '-,,,;, :::> (::> ':-:1 ;'" :,.c: -< ~; '~"". --,-~> ",~-~.- "',,, ""., y POST & SCHELL, P.C. BY: RICHARD 1. MCMONIGLE, JR. !.D. # 33565 1800 JFK BOULEVARD, 19TH FLOOR PHILADELPHIA, PA 19103 (215) 587-1000 ATTORNEYS FOR DEFENDANT PENN TREATY LIFE INSURANCE COMPANY DOROTHY Z. SCHULTZ, by her Attorney-in-Fact, GLENN E. SCHULTZ Plaintiffs, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 00-5935 PENN TREATY LIFE INSURANCE COMPANY CIVIL ACTION - LAW Defendant. ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter my appearance on behalf of the Defendant, Penn Treaty Life Insurance Company, in the above-captioned matter. POST & SCHELL, P.C. BY~~ RICHARD L. McMONIG , JR., ESQ. Attorney for Defendant ~, ,- ~. ~ ~ _~,"~" ~~"' -- '-~~'., ""'"'",,,,- -,_,t_ "V<',^' .'C"''',",s '., .-..,."'~:;.","'.~--J'. __..',,,',,<t.", , CERTIFICATE OF SERVICE I hereby certifY that a copy of the foregoing Entry of Appearance has been served via first class mail on September 22, 2000 upon the following person(s): Charles E. Schmidt., Jr., Esquire SCHMIDT, RONCA & KRAMER, P.C. 209 State Street Harrisburg, P A 1710 1 POST & SCHELL, P.c. BY ~k/~4/~'~ RICHARD L. McMONI. If. ., ESQ. Attorney for Defendant . -2- -"".;.j<" ',,-,'__ _,~< O~_ < , (') Cl () C c.::.' -'\"( ?.;: rl') uC;; ;-" -:0 rnrr-, -0 z;n N 'i ~C \..,...-' U5.,::~, UJ (~) ~E -~; ;A~=H "i?c', -;:,,~ ':,4() Z.' (Sir' :Pg ~ -"l 3. ::J '!> ':0 W -< ,--,- :::