Understanding Long-Term Care Insurance Underwriting, Premium Offers, Benefits Modifications & Declines

YOUR INSURABILITY – HEALTH IS WEALTH!

MONEY PAYS THE PREMIUM – HEALTH QUALIFIES FOR THE COVERAGE

You can always purchase an investment!

However, you can’t always BUY a LONG-TERM CARE INSURANCE POLICY.

Why?

Your INSURABILITY, which allows you to qualify for long-term care insurance, can also change at a moment’s notice.  HEALTH IS WEALTH!  One may not realize the importance of insurability until it changes or has changed.  This is why proper long-term care insurance planning ALWAYS has to occur before you receive an unfortunate medical diagnosis and certainly before the need for care.

I can’t tell you the right time to apply.  However, I can tell you the wrong time, and the wrong time won’t be the right time.  Therefore the right time is always right now…  

Purchasing sooner rather than later is simply a smart planning move to put on your to-do list.

Don’t wait for a diagnosis!

The biggest mistake often made with long-term care planning is putting it off until health issues can make long-term care planning much more costly or impossible to qualify for coverage.

What You Need To Know Written By 3D Hand

Protecting yourself with an individual long-term care policy is a significant acceptance of risk by an insurance company.  The evaluation process involves many key factors including your age, sex, medical conditions, prescription drugs, and cognitive testing to provide an accurate picture to the underwriter before they will accept you for this valuable financial protection and peace-of-mind long-term care insurance provides you, your spouse and children.

Why Am I Automatically Being Declined?

Certain RISK FACTORS will disqualify you immediately before submitting an application. 

(1) Serious medical conditions along with some medications used to treat a variety of significant health issues will cause an automatic decline.

(2) Your height and weight determine your body mass index (BMI), which is used in evaluating your long-term care policy eligibility.  If your weight is below or above the height parameters listed below, your application will be declined.

(3) Anyone requiring assistance with activities of daily living (ADL’s), or requires assistance with instrumental activities of daily (IADL’s) will be declined.

Why Am I Being Postponed?

Here are a couple examples of why you would be postponed.   

(1) Are you receiving any joint injections of cortisone or other steroid medication in the last 6 months?  You should wait to submit an application 6–12 months (depending on the reason for the injection and if there were multiple injections)

(2) Are currently receiving or scheduled for physical, ocupational or speech therapy or receiving more than two monthly maintenance chiropractic care visits?  You should wait until you are released from care and back to 100% activity without limitations.

(3) Are you having surgery scheduled in the next 6 months or have been advised to have surgery that is not yet completed?  Surgery must be completed, you have been released from care, fully recovered and back to 100% activity without limitations.  

(4) Are you currently being evaluated for an undiagnosed medical condition?  An application should not be submitted until all evaluations have been completed and a diagnosis has been made. 

Puzzle-Pieces

Putting The Pieces Of Your Insurability Puzzle Together

Pre-underwriting Informal Inquiry (If Needed)

Jigsaw

My goal based on the medical information provided to me is TELLING YOU IN ADVANCE, before applying, what issues you’ll face in underwriting while we work together to get you the best offer possible.

Letting you know what an individual long-term care insurance policy will cost is important, however, it is more important to HELP you understand any possible underwriting issues if any, that would cause an additional premium to be charged, benefits to be modified or why you would be declined.

This is where experience counts and, I will submit a PRE-UNDERWRITING informal inquiry, if needed, with general medical information and details.  This approach will allow us to receive an underwriter’s opinion about your eligibility, insurability and tentative rate classification before formally applying for coverage – saving time for both of us and MANAGING YOUR EXPECTATIONS, which is most important throughout the entire underwriting process.

A PRE-UNDERWRITING informal inquiry offer is tentative, nonbinding and does not take the place of a formal application and complete underwriting to determine acceptance.

Hand Writing Inscription Understanding With Marker, Concept

Risk Factors Resulting In An Extra Premium Charge, Benefit Modifications, Or Declines

The underwriter on behalf of the insurance company carefully reviews the information provided them regarding your insurance application to determine risk factors, if any, using guidelines and procedures established by the insurance company.   Long-term care underwriting is strict because the underwriter has only one chance to evaluate the potential risk and make a decision.  In addition, long-term care claims can cost an insurance company a great deal of money if the underwriter makes a mistake.

I would hope every application is APPROVED AS APPLIED FOR by the underwriter at the best premium rate with no additional premium changes or benefit modifications.  However, this isn’t always the case due to RISK FACTORS the insurance company faces with each applicant and the overall potential for future claims.

Here is why an extra premium charge, benefit modification or a decline is necessary when the underwriter has determined…

Risk Factor Card In Hands Of Medical Doctor

the applicant has a specific medical condition such as organ, joint or musculoskeletal disorders and is considered to be a higher risk for utilization of long-term care services.

OR

the applicant has a severe impairment, very specific or likely to recur that can also result in having a long-term care claim sooner than someone without the same risk factor.

Know the company wants to approve long-term care insurance applications and collect premiums, but this is how they
balance out the risk to the insurance company for all insureds, or everyone would pay more for this type of insurance.

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Receiving an offer with an extra premium charge,
or a benefit mofification is still a valuable offer.

Why?

You were still approved for a pool of money to be used for all levels of long-term care that adds to and protects your retirement assets,
while providing financial security and peace-of-mind for you, your spouse and children.

Declined Deny Reject Stamp Concept

What To Do If Your Application Is Declined For Something We Couldn’t Anticipate?

Ideally, there should be no surprises in the processing of your application and any risk factors that caused a decline would have been determined in advance.  Therefore I would not have recommended an application be submitted on your behalf.

However, here are a couple reasons how an application can be declined even after determining no obvious or initial risk factors.  Sometimes medical records aren’t reviewed in advance when something adverse is noted by your doctor, which you weren’t aware of, and the underwriter has now seen this information causing your application to be declined.   You provide blood and urine tests if required and something abnormal shows up in the results or you fail the cognitive interview and the underwriter stamps decline on your application.

Unfortunately, some declines can’t be reversed or changed.

The insurance company will send you the specific reason for your declination.  We will discuss your personal situation and determine if the appeal process is an appropriate course of action. 

take action time to act now is the time or never take initiative
last chance act now or never stop before it's to late don't wast

Marc Maretsky Personal Insurance Services based in Beverly Hills, serves all of California and the United States.  I help my clients acquire life, disability, long-term care, and critical illness insured solutions, as well as enroll them into Medicare when eligible.

“No matter how fast technology changes our world and everything around us.  I believe the personal touch and a human voice are more important than ever.”

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