Why You Could Be Declined For Long-Term Care Insurance

In most cases, if you are in reasonable health you can expect to be approved for long-term care insurance. But approval is not automatic and there are guidelines that the major carriers use to determine who qualifies. These guidelines are published by each carrier in an underwriting field guide which agents use to help them decide whether someone is a good candidate for long-term care insurance with that company. Many underwriting procedures are fairly standard across the industry.

Factors That May Rule You Out

Some of the most common reasons why a person could be declined for this kind of insurance include health conditions such as: multiple sclerosis, Parkinson’s disease, AIDS, ALS (Lou Gehrig’s disease), Alzheimer’s or dementia, muscular dystrophy and certain aggressive and metastatic cancers. Most applications for long-term care insurance contain language designed to discourage someone with these conditions from placing an application with that company.

There are other more common illnesses that can also result in decline under certain circumstances. Those with more mild cases may be approved while those who have more advanced forms of the illness or disease may be declined instead. These can include: arthritis (especially rheumatoid arthritis that affects weight-bearing joints), Type 1 diabetes which requires substantial amounts of insulin to control, autoimmune disorders such as some forms of lupus, advanced osteoporosis, and others.

Some illnesses may be acceptable alone but may be declined in combination with other factors. For instance, some carriers will take a dim view of tobacco use when in combination with diabetes. Back problems associated with the use of narcotics on a daily basis to control the pain can be another reason for decline.

Bottom Line: Find an Honest Agent

As you can see, there are several factors that must be considered before applying for long-term care insurance if the applicant has health issues. What one carrier may allow, another will automatically decline. This calls for the agent to be knowledgeable and honest with each prospective client regarding his or her chances for approval. This means that the agent should not assign unrealistic rate classifications to those who most likely will not be able to get them based on the underwriting procedures of that carrier.

Since the cost of the insurance is influenced heavily by the rate classification based on health, there is a tendency on the part of some agents to promote rosy expectations in the application stage in order to get the sale. This does not benefit the client in the long run. You are better served by working with a competent, experienced agent who will be honest in assessing your candidacy for long-term care insurance with regard to your individual health condition.

Until next time...Duane

Posted in Applying for LTCI, Financing Long Term Care, Long-term Care Insurance (LTCI)