Declined LTC Applicants Have More Available Options

Read Time: 5:58
Published: Jun 25th, 2015
Declined LTC Applicants Have More Available Options
Article Updated:March 8th, 2021

Long-Term Care Insurance has become, for many American families, an essential part of their overall retirement plan. Many people start planning in their 40s or 50s to take advantage of substantially lower premiums due to their age and better health. However, despite younger people getting coverage, many are still finding it difficult due to health issues.

Every insurance company has underwriting rules that they use to screen applicants. These rules vary among insurance companies. An individual might not be eligible for coverage with one company but easily insurable with another company.

Many insurance companies that offer Long-Term Care Insurance have become more conservative in their underwriting philosophy. Ideally, you want to obtain coverage when you have reasonably good health.

So You Think You're Healthy?

While many people think they are "healthy," they often find, once interviewed by a Long-Term Care Insurance specialist, that their preexisting health conditions make them more difficult to insure, or in some cases even impossible to insure.

Once in the application process, the insurance company finds more information from your nurse interview, medical records, and prescription drug check.

There are several factors involved in both underwriting and premium calculation. These factors include:

1. Age at the time of application

2. Health - including your lab work

3. Tobacco and alcohol use 

4. Height and weight

5. Family history

Luckily for the consumer, many products are available to choose from with different underwriting rules and price points. No matter which type of product you choose, having a plan to address the future costs and burdens associated with aging and health issues is essential. 

Your Health Insurance Won't Pay for Most Long-Term Care Services

Since health insurance, including Medicareand Medicaresupplements, will not pay for any long-term custodial care, most of these costs get paid from our savings. 

Custodial care is what most of us will need as we face aging and health issues. Custodial care includes help with everyday living activities and dementia care and supervision. 

Even skilled long-term care will not be covered by health insurance or Medicareif you need care over 100 days. In either case, you will either have your family provide your future care or use your savings to pay for care services. Often it's both. 

Guaranteed Tax-Free Benefits

Long-Term Care Insurance offers guaranteed tax-free benefits to give you access to your choice of care - either at home or in a facility. However, you must have a policy in place before you need care.

A qualified Long-Term Care Insurance specialist will review your detailed health history to make appropriate recommendations. No matter your current age or health, you might have affordable options to address the consequences of extended care. 

There are several options available. Traditional Long-Term Care Insurance is usually the most comprehensive and cost-effective way to address your future care needs. Still, not everyone can health qualify for a plan. 

Other options are available, in addition to traditional Long-Term Care Insurance. These options include short-duration (short-term) plans and hybrid options. These alternative options are ideal for those who might have some health challenges.

Why People Require Long-Term Care Services

People require long-term care services due to illness, accidents, or the impact of aging. Longevity itself is a risk for needing long-term care services.

The fact is long-term care is both a cash flow issue. Your future need for extended care services places a physical, emotional, and financial burden on your family when they are left to provide and manage care. 

Your risk of needing long-term care increases with aging, although the need for care is not limited to those who are older. People require long-term care due to an illness, accident, or just the impact of longevity.

Decline Rates for Long-Term Care Insurance

As many as 45% of individuals who apply for Long-Term Care insurance get turned down for coverage. As you get older, the chance for a health issue that would disqualify you for coverage increases. 

If you have been declined for long-term care coverage in the past, you still might have options available, depending on the specific reason you were declined. For these individuals and others seeking affordable protection, a less-known option exists.

"Short-Term Care insurance, which is sometimes referred to as recovery care insurance, can provide millions of older Americans with meaningful and affordable protection for their care needs."

Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI).

Insurance Options for Those with Health Issues Available 

The Association launched the National Advisory Center for Short-Term Care Information to increase public awareness.

The standard short-term care insurance policy provides coverage for two years or less. As a result, the policies are less costly than traditional Long-Term Care Insurance policies that can provide benefits for more extended periods.

"These policies are ideal for individuals in their 60s and 70s who can not health-qualify for traditional LTC coverage or those seeking a more affordable option."

Jesse Slome

According to AALTCI's latest research, 21 percent of those who applied for Long-Term Care insurance between ages 50 and 59 were declined by insurers last year. 

"Almost half (45%) of those who applied between ages 70 and 79 were declined because they had health issues. For many of these individuals, a short-term care policy is a great alternative option."

While the typical buyer of short-term care insurance is between the ages of 65 and 75, some insurers will accept applicants who are 80 and older. However, even those in their 50s often have a health issue where this type of product is ideal.

Most policy applications ask between seven and 12 health-related questions. 

"If you can answer no to all the questions, you are 90% through the health underwriting process," he explained.

An Affordable Option To Traditional LTC Insurance

Like traditional Long-Term Care Insurance policies, short-term care policies will pay for in-home care and care in a skilled care setting such as a nursing home.

"A typical benefit amount might be $100 or $150-a-day, which will pay all or much of the cost for home care services."

Jesse Slome 

The policies also can pay in addition to Medicare, something a traditional LTC insurance policy is prohibited from doing.

"While some long-term care insurance claims last for many years, almost half of all claims last one year or less."

 "Having some protection is always better than having no protection at all, making the short-term option very attractive to millions."

Jesse Slome 

Experts also share it is generally easier to get accepted for coverage with policies of this type. The National Advisory Center for Short-Term Care Information posted examples of short-term care application questions on its website. 

"If you can answer 'no' to the questions, you are 90 percent on your way to being accepted for coverage," Slome shares.

Plans are Custom Designed

Short-Term Care Insurance policies offer multiple options, often similar to traditional LTC insurance, according to Slome. "The typical premium for someone age 65 is about $100-a-month," he adds. "For someone age 70, it's about $150-a-month."

Most Long-Term Care Insurance specialists will offer all these types of products to help you find the most appropriate and affordable option. Find a trusted and experienced specialist by clicking here

About the Author

An LTC News author focusing on long-term care and aging.

Editor's Note

If you were declined for coverage in the past, or you were told you were not eligible for coverage, you still might have options available depending on the reasons for the decline. 

Ideally, start planning before you retire. However, plans do exist for people, even in their 80s, depending on their health. Start your research by finding the current and future cost of care services where you live.

Use LTC NEWS Cost of Care Calculator

The LTC NEWS Cost of Care Calculator will show you both the current and future costs of extended-care. You will see the costs for in-home care, adult day care centers, assisted living facilities, memory care centers, and the traditional nursing home. 

Click here and look for your location. 

Always works with a qualified and trusted Long-Term Care Insurance specialist who works with the major companies in all categories. Click here and find your specialist. 

Get The Facts

Understand you can't obtain any coverage if you already need care or are expected to need care very soon. However, don't get depressed if an insurance agent says you don't qualify for coverage. Find out the truth by seeking the opinion of a qualified Long-Term Care Insurance specialist.

Research Tools on LTC NEWS

LTC NEWS offers many resources to learn about the available options and learn about long-term health care issues. Click here and discover these resources. 

This comprehensive guide is an outstanding first-read -  The Ultimate Long-Term Care Guide. Be sure to take notes so you can ask the appropriate questions when you speak with a qualified and trusted Long-Term Care Insurance specialist.

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LTC News Contributor James Kelly
James Kelly

Contributor Since
August 21st, 2017

LTC News author focusing on long-term care and aging.

About the Author

LTC News author focusing on long-term care and aging.

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