Health & Financial Qualifications
You must health-qualify for LTC Insurance.
I. Health Qualifications
Not everyone can health-qualify for long term care insurance. Those who do not qualify (or can but don't) will pay out of pocket. They may have waited too long to insure. If you cannot health qualify there are other products to consider.
|The percentage of applicants denied increases with age:|
|Age||% of those who apply and cannot health qualify|
|Not only does the premium go up the older you are when you apply, your health might prevent you from buying this insurance at any age, meaning you'll have to find money somewhere else to pay for care. You can see why it's important to insure while young and insurable.|
If you can qualify for preferred health you'll save 15% on your premium, another reason to insure while you're at your healthiest. The younger you are the cheaper it is, and the less you will pay over your lifetime.
The guidelines listed below are provided a guideline to determine if you might qualify but only by pre-qualifying with a quote, and in some cases only by applying for approval will Insurability be certain.
- A person should be able to perform activities of daily living such as bathing, dressing, eating and walking.
- A person should have the ability to handle daily activities such as finances, housework, laundry and meal preparation, shopping, taking medications and transportation.
- A person should have the ability to function without assistance from another individual or mechanical device (e.g. a walker, wheelchair, oxygen or dialysis.)
- A person should have clarity of thought with no signs of memory loss, confusion or forgetfulness.
- All acceptable medical conditions must be stable and well controlled. (Medical conditions should not be severe or deteriorating, e.g. anticipating surgery, medical work-up in progress or undergoing physical therapy.)
If you respond yes to any of the following you may not be eligible to apply for long term care insurance. Have you had, do you currently have or have you ever been medically diagnosed as having any of the following:
- ALS (Lou Gehrig's Disease)
- Alzheimer's Disease
- Cirrhosis of the liver
- Diabetes under treatment with insulin
- Diabetes Type II and heart problems
- Frequent or persistent forgetfulness
- Memory loss
- Metastatic cancer (spread from original site/location)
- Multiple sclerosis (MS)
- Muscular dystrophy
- Organic brain syndrome
- Parkinson's disease
- Transient Ischemic Attach (TIA) within the past 5 years
- TIA in combination with diabetes or heart surgery
- TIA two or more times
- Do you use a walker or wheelchair; oxygen; respirator; or kidney dialysis; or need assistance or supervision by another person performing any of the following: moving in/out of bed or chair; bathing; eating; toileting; bowel/bladder control; walking.
- In the past 6 months have you had: open heart surgery; back or spine
Unless you haven't seen a doctor in over 2 years normally only a health interview and medical records review is required. If it has been more than 2 years you should get a physical before applying.
Depending on the benefits you want, your health and age, a phone or in-person health interview with a nurse may be requested. We will tell you what is involved in your interview if you apply through us.
In addition to the list above LTC underwriters will look at the overall health of a person and there may be a combination of health issues that prevent underwriting. As you know a change of health can occur without any warning and once it occurs you may not be insurable.
If you have hypertension, high-blood pressure, type II diabetes, or pre-diabetic you should see if you qualify before your health changes and you become uninsurable.The risk that our health may change is real and it is not something we can plan for, but planning for long term care is something we can do.
II. Financial Qualifications
Not everyone qualifies financially but everyone should have a plan.
For those with no assets or are low-income would most likely be depending on state aid (Medicaid/welfare).
Many families are going to face the financial burden of long term care expense. According to financial advisor Jonathan Pond, long term care expenses are the main reason estates are depleted.
The purpose for this insurance is to protect that nest egg you've spent years building or are in the process of building. That nest egg is your income for retirement. Imagine what it would be like if you had to spend that on long term care.
For every $1,000 of monthly retirement income (to pay for care) you want to generate from your own savings, you will need about $230,000 in assets, according to the Schwab Center for Investment Research. For example, if you want $3,000 a month, or $36,000 a year, you would need savings of $690,000.
That's a conservative estimate, assuming that you earn 5.2% on your investments and live off the earnings without dipping into the principal.
A $3,000 a month long term care insurance policy might cost $1,000-$3,000 a year depending on age, health and other benefit options chosen. According to Medicare and Medicaid about 70% of Americans will need some long term care. Do the math.
III. Other Issues
The non-financial side of long term care insurance is the support you get from the care coordinator, the person who will help to set up and manage your care at no cost to you. Ask anyone who has had to do this how much is involved and how stressful it was for them (and their family).
If you or your spouse needed care, who would you call? Would you look in the yellow pages for care providers? Who would you know to trust? You've heard the horror stories about theft and abuse by care givers. Why take a chance, let a professional help. With insurance you will have care management not crisis management.
The care coordinator is not a gatekeeper, it is usually a local nurse: who knows everyone in your community that provides whatever you need for your care, be it a carpenter for home modifications, home care helpers, therapists or others. This saves you and/or your family from setting up and managing care, which can be very stressful and time consuming.