What do you do when one spouse/partner gets declined for Long-Term Care Insurance coverage?
What We'll Cover
Most couples will apply for Long-Term Care Insurance coverage at the same time. While most people apply for coverage in their 50s, there are still those who get declined for coverage due to preexisting health history and information obtained from their medical records.
In addition, many insurance agents and financial advisors fail to ask the detailed health and family history questions necessary to reduce the risk of decline or choosing the wrong insurance company.
Remember, every insurance company has its own underwriting guidelines, which vary just like the premiums. Trying to avoid the decline is always preferable, but it does happen even when the right questions are asked.
Review the Letter
If a spouse or partner does get declined, they will get a letter from the insurance company. Remember, it is vital to keep the policy for the person that was approved. Once in a while, the couple's attitude is, "If you can't insure us both then forget it."
It becomes even more critical that the insurable spouse/partner has coverage in place protecting assets, as the uninsured spouse will need some of that money to pay for future care.
Plus, you want to avoid a situation one spouse drains a large amount of savings to pay for care, leaving the other spouse with little, or where both spouses need care at the same time.
Review Reason for Decline
Be sure the agent/specialist/advisor has received the notification from the insurance company. If not, be sure to share the information with them.
The first step is to determine if the information is correct. There are errors in medical records, and if there is an obvious error, it should be corrected. Errors can be almost anything from someone else's records or labs, incorrect or coding, or incomplete or old information.
You may need to get a letter from your doctor indicating that the information is inaccurate and providing the support information.
For example, let's say the insurance company declined your application because your last blood work was from three years ago. However, three months ago, you did have a full comprehensive metabolic panel (CMP- a test measuring 14 different substances in your blood customarily run annually with your check-up). You would obtain a copy of that lab study and send it to the insurance company. A Long-Term Care Insurance specialist will often have you forward it to them; otherwise, you may have to send it directly to the insurance company.
Researching Other Companies
If the information in the decline letter is correct, the insurance agent/advisor or specialist will research another insurance company that may accept that health issue.
Keep in mind that many general insurance agents and financial advisors only work with one or two insurance companies. Even some specialists only work with one or two companies. You may have to seek someone else if they are unable to pre-qualify you, if possible, with another insurance company.
Couples Don't Need to Have the Same Insurance Company
Sometimes a couple might think they both should have the same insurance company. There are some advantages and conveniences to having long-term health care coverage with the same insurance company, but it might not be in your best interest.
It could be more expensive for the agent or advisor to move both of you to the same company. If pricing is not a major obstacle, be sure not to give up approved coverage before obtaining new coverage.
Most of the time, if one spouse or partner does get declined, it is best for the person approved to maintain their policy and find available coverage for the other person. This is why seeking advice from an experienced Long-Term Care Insurance specialist who works with the top companies is helpful.
You might find that a hybrid policy or short-term plan will be open to pre-existing health issues that traditional policies would not.
It can be frustrating to hear that you or your spouse is ineligible for Long-Term Care Insurance coverage. Having some plan, even a small one, will help you access quality care, protect savings, and ease the stress otherwise placed on those you love.