Long-Term Care Insurance can be a great way to cover the cost of long-term care. If you're reading this article, you've probably decided it's a good solution for you or a loved one. The next step is to apply for coverage. But how exactly does that work?
Many people feel confused or overwhelmed by insurance applications. They may worry about saying or sending the wrong documents to an insurer. Others may have had negative experiences in the past.
LTC News is here to guide you regardless of your prior experience with insurance applications. We work with Long-Term Care Insurance specialists to answer common questions about coverage. Our goal is to give you the tools you need to make confident and informed decisions about coverage.
This article will cover the Long-Term Care Insurance application process. We'll show you how to apply for coverage and what you can do after receiving your application decision.
How To Prepare To Apply For Long-Term Care Insurance
First things first, there are a few steps you can take to ease the application process before you apply. These steps include:
Meet With A Long-Term Care Insurance Professional
By law, anyone who applies for Long-Term Care Insurance must have the help of a licensed insurance professional. That means you or your loved one won't be able to submit an application on your own. Different professionals can provide varying levels of help throughout the process.
If you or your loved one don't have many questions, any licensed LTC Insurance agent can help. But if you have specific questions or needs, a Long-Term Care Insurance specialist may be a better fit.
There's no extra charge to meet with any Long-Term Care Insurance agent, including specialists. Specialists and agents make commissions from insurers, not from the people they help.
The type of agent or specialist you meet with won't impact the policy rate or premium. Since policies are regulated, no insurance professional can offer discounts or upcharges.
Long-Term Care Insurance Specialists
LTC Insurance specialists are long-term care experts. They'll work with you or your loved one to find the best insurer and policy for your needs and budget.
The benefit of meeting with specialists is their knowledge of each insurer's underwriting guidelines. Underwriting guidelines are how companies decide whether or not to insure an applicant. Each company has different criteria. You can read LTC News's article on underwriting to learn more.
Specialists work closely with and understand each company's guidelines. In other words, they can match you or your loved one with a company that's more likely to accept the application.
If you decide to meet with a specialist, they'll ask questions about your unique situation. These questions cover many areas, including but not limited to:
RELATED: Long-Term Care Insurance Specialists vs. Financial Advisors (Pros & Cons)
Research Long-Term Care Insurance Coverage
Another tip is to research all the policy options available to you or your loved one. It's valuable to do this research before applying for a policy. Specialists will usually go over this with you when you meet.
You should research beforehand because switching once you already have a policy may be difficult. It's also probably not in your best interest to switch your policy once coverage begins. There are a lot of reasons for this, including:
Your health may have changed – Certain health concerns and conditions could prevent you from starting a new policy. The cost and your ability to qualify for coverage depend on your health.
You may not be able to qualify for another policy – Each company has different guidelines for who they do and don't insure. These could also change anytime, meaning a company could choose not to insure you.
A new policy may not be affordable – Premiums are based on health and age. The cost of a new policy increases as you age and your health declines.
If you insist on getting another policy after you're already covered, there are a few options. These include adding a second policy or policies specifically designed to replace old coverage. You may want to meet with a specialist to learn more about those options.
Traditional vs. Hybrid Long-Term Care Insurance Policies
The best course of action is to research and decide what policy you want before you apply. There are two main types of policies you should be aware of. These are traditional and hybrid Long-Term Care Insurance policies.
LTC News has an FAQ article comparing traditional and hybrid policies. You can read this article to learn about each policy type and which may work best for you.
Riders For Traditional Long-Term Care Insurance Policies
Outside of policy types, most companies offer policy add-ons, also known as riders. Riders allow you to customize your coverage at an extra cost. We have an FAQ article about different riders available to add to traditional Long-Term Care Insurance policies.
Does Your Potential Policy Meet Federal Guidelines?
You'll also want to research Long-Term Care Insurance companies. These days, only a few companies offer federally qualified, traditional policies. Having a federally qualified policy is important for a few reasons. These are:
Some policies may look similar on the surface but act very differently in practice. An LTC Insurance professional can help you find and apply for a policy that meets federal guidelines. You can read LTC News’s regulations article to learn more about federal guidelines.
What Components Create Long-Term Care Insurance Policies?
Lastly, it may be beneficial to learn about the aspects that make up Long-Term Care Insurance. This includes the elimination period, monthly benefit amount, and total benefits.
These components have a huge impact on the cost and functionality of your or your loved one’s coverage. For more information, read LTC News’s FAQ article explaining the components of a Long-Term Care Insurance policy.
The Long-Term Care Insurance Application Process
The real application starts during or after a meeting with a licensed insurance professional. Most companies use online applications, including a health questionnaire.
The application process varies based on age, health, and family history. Here are a few steps your application may include:
The type of interview (or assessment) you’ll have will depend on your age and health history. Here’s a quick visual to help you understand how you’ll have your interview and cognitive assessment.
How Age Impacts Applicants’ Interview & Cognitive Assessment
How Age Affects the Interview & Cognitive Assessment
Phone interview & no cognitive assessment
Under 60 (family history of dementia)
Phone interview & cognitive assessment
60 – 64
Phone interview & cognitive assessment
65 & older
In-person interview & cognitive assessment
(Reminder: This is a general example of how the interview process works. Every company is different and may have varying requirements depending on the situation and person.)
Application & Health Questionnaire
The application and health questionnaires are the bread and butter of the application process. Most companies use electronic applications today because they're safer and faster than paper applications.
The application will ask for personal information, such as your:
Address and living situation
Social security number
Name, contact information, and the last time you saw your primary care doctor, surgeons, or specialists.
The health questionnaire may ask about:
It's essential for you or your loved one to answer all the questions honestly. Insurance companies will discover any discrepancies in your application. Significant errors on the application can affect your ability to qualify for coverage.
The application will also include a waiver to release medical records. Most companies want to see an overview, a five-year prescription drug history, and a MIB report.
A MIB (Medical Information Bureau) report includes past health insurance, claims, and diagnostic information. This helps companies better understand how much risk an applicant is to insure.
Once you sign the waiver, the insurance company will order your records from your doctor and pay the release fees. As an applicant, you will never be responsible for sending medical records or paying release fees.
Interview With A Nurse
After submitting an application, you'll have an interview with a nurse. For applicants 65 and older, this interview occurs in person. The nurse may also measure height, weight, vitals, and blood pressure.
For those under 65, the interview usually happens over the phone. Although, depending on the situation, those under 65 may also complete in-person interviews.
During the interview, the nurse will ask more detailed questions than those on the application. You should answer everything as honestly and concisely as possible.
The cognitive assessment is a series of tests only applicable to some applicants. As mentioned earlier, your age, health, and family history impact whether you'll take a cognitive assessment. (Your behavior during the phone interview could also trigger an assessment.)
Cognitive assessments look different at every company. These tests measure one's ability to live and thrive in their home environment. They also test for predispositions to mental illnesses like dementia and Alzheimer's.
Generally, these assessments use methods from the Minnesota Cognitive Acuity Screen (MCAS) and the Enhanced Mental Skills Test (EMST). These methods are a series of smaller tests, which we'll list below, that determine with 98% accuracy if an individual has dementia or Alzheimer's.
Generally, these assessments can include:
These tests were designed to mimic the human memory and mind. All words and topics used in the assessment were hand-picked by their commonality and usability.
These tests are easy to pass for those with a healthy memory and mind. Individuals in various stages of cognitive decline will struggle with their reactions and fail the assessment.
Insurance companies try to avoid insuring anyone with active cognitive decline. That's why these tests play such a pivotal role in the application decision. They're the only way to determine if an applicant has cognitive issues like dementia or Alzheimer’s.
Word Recall Assessment
The word recall test measures attention, concentration, and working memory. It focuses on the ability to retrieve words from memory during a conversation.
Many word recall tests start with instructions. A nurse will explain the assessment and list ten words to remember and repeat. Sometimes nurses will let you choose ten words to list instead. During this stage, the nurse observes your ability to concentrate and pay attention. Next, you’ll repeat the list and use each word in a sentence.
After a short break, usually around 5 minutes, the nurse will ask to recall the list again. This test measures episodic memory. Nurses look out for changes in performance compared to the working memory test.
Word Association Assessment
The word association assessment measures language comprehension. This test involves connecting two words in some way.
For example, one might think of "dog" when they hear "cat" because these words often appear together in language. Nurses will pay attention to which words you associate with others. This test helps the nurse see how well you understand language and how words relate.
Individuals with cognitive decline may associate words with nothing in common. Using the example above, they may respond to "dog" with something like "airplane." The nurse will track how many words this happens with. If it happens with several words, you may fail the test.
Verbal Fluency Assessment
The verbal fluency assessment measures the ability to think quickly and accurately to generate appropriate word responses. This test involves free recall.
During this test, the nurse may name a category and ask the applicant to list as many words as possible within 30 seconds. For example, if the category were "animals," you’d have 30 seconds to list as many animals as possible. The nurse will pay attention to how you list these words and how many you can list within the time limit.
Individuals with cognitive decline may hesitate or have trouble coming up with words in a short period of time. They may also list words that clearly don't fit the given category. The nurse will note any difficulty with this assessment, which may lead to test failure.
Orientation assessments measure your awareness of your situation and the world. During this test, a nurse may ask about current events or items encountered daily.
The nurse may also ask open-ended questions about your or your life. For example, they may ask basic personal questions like your home address or how you’re feeling.
Those with cognitive issues may have trouble answering the questions. It may be confusing or hard for these people to remember simple information. Anyone who fails the orientation test is not likely to get approved for insurance.
Simple Math Assessment
The simple math assessment focuses on math-based word problems. This test assesses concentration and problem-solving skills.
For example, an interviewer may use a story with a math equation. Let's say a man named John goes to a grocery store. While he's at the store, John buys milk, a bag of chips, five apples, a block of cheese, and a pomegranate. On the way home, John eats two of the apples. How many apples does John have when he arrives home?
Individuals with cognitive problems often cannot complete the math problem. They get lost in the story or find it difficult to focus on the numbers. Insurance companies may decline those who fail a simple math assessment.
Final Steps In The LTC Insurance Application Process
Once you or your loved one complete each step, the information goes to an underwriter. They'll use the information to determine how risky you are to insure. Underwriters do this by comparing your application to the insurance company's criteria.
Underwriters decide whether or not to approve individuals for coverage. Applicants who meet the company’s guidelines will be approved. Approval mostly depends on health, and most companies have three health tiers, also known as rate classes.
If only some of your or your loved one’s application aligns with the guidelines, you may receive a counteroffer. A counteroffer is when a company only approves you for specific or reduced benefits. This may limit the total benefits available within your policy or affect the cost.
If most of your information fails to meet the guidelines, you won't be able to start a policy. At this point, the insurer will issue a letter of decline. In the next section, we'll explain what you can do about declined applications.
Declined Applications For Long-Term Care Insurance Coverage
Insurance companies send a letter of decline to those with declined applications. This is a mailed letter that provides more information about the application decision. The letter of decline explains which conditions or issues disqualify you from coverage.
If your or your loved one’s application has been declined, there are two options. You can either:
We'll discuss appeals and applying to different companies in this section.
Appeal Process For Long-Term Care Insurance
You should pursue an appeal if you believe your application was wrongly declined. There are a few reasons an appeal could be successful, including:
Incomplete information in your medical records
False information in your medical records
A decline reason that doesn't match the company's underwriting guidelines
Did you know transcription and data entry errors are somewhat common? It could be as simple as missing information, like lab work. But it could also be as complex as someone else’s medical records getting mixed in with yours.
Regardless, inaccurate medical records are not unheard of or uncommon. You can read this article that discusses medical record errors for more information.
An LTC Insurance specialist can help you determine if there's an error in your records. They'll review your application and medical records to check for errors. If they believe there's a valid reason or error, they'll help you with an appeal.
You'll need to contact your primary care doctor to appeal an application decision. Your doctor must correct or add any missing information to your medical records. They'll also have to write a letter explaining the error to the insurance company.
Your LTC Insurance specialist will let you know if they don't expect the appeal to succeed. They can also help you find and apply for similar options. In the next section, we'll explain how to apply for coverage following a declined application.
Applying To Another Company
You or your loved one shouldn't pursue an appeal if all the information is correct. Instead, a better option may be to apply to a different company.
It can be challenging to qualify for coverage after receiving a letter of decline. A Long-Term Care Insurance specialist can direct you to the appropriate insurance companies.
Specialists have a better understanding of each company's underwriting guidelines. Conditions that may be unacceptable for one company may not be an issue for another.
Sometimes specialists can get an exception from a second insurance company. Exceptions allow you to apply for coverage with a second company after a rejection from the first company.
Specialists have to build a compelling case for an exception to work. They'll have to prove why you'd match their underwriting criteria.
Options Outside Of Long-Term Care Insurance
Some companies will not accept previously rejected applicants. This means if you’ve been rejected, you may not be eligible for a traditional policy with any company. Depending on your health, you may still have a few options:
Short-term care insurance offers similar benefits and coverage to Long-Term Care Insurance. However, most short-term care policies only cover up to one year of facility care and one year of in-home care.
While this option might not be a complete solution, it can definitely help more than no coverage at all. If possible, it may help to apply for more than one short-term policy to increase your overall benefits.
A hybrid policy combines life and Long-Term Care Insurance into one. Policies like hybrids may be easier to qualify for. The downside to hybrid policies is that they’re usually more expensive and paid up-front with one premium.
If no other insurance options work for you, you may need to pay for care with your income and savings. Paying for care out-of-pocket is risky and expensive, but sometimes it's the only option.
Applying For Long-Term Care Insurance Coverage
The Long-Term Care Insurance application process has many steps. These may include a meeting with an insurance professional, an application, an interview with a nurse, and a cognitive assessment.
After you or your loved one apply, the insurer will either approve or decline the application. A professional can help you assess other options if a company declines the initial application.
You should also remember that some companies may use a different process than the one discussed here. We tried to include a wide range of procedures, but every application is different. Some people may experience more or fewer steps depending on the company and their health and age.
LTC News wants to answer all your questions about coverage. We've included a list of resources below to help you navigate your long-term care journey.