How to apply for long term care insurance

Page Reviewed / Updated – September 14, 2020

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Table of Contents

Definition

Long Term Care Insurance, sometimes called Nursing Home Insurance, is a policy that pays for some or all a senior’s long-term care costs in exchange for monthly premiums that typically range from $250-$1,000 / month. Depending on the policy, payouts can be used to pay for services at home, in adult day care, in assisted living and in nursing home communities.

Introduction

Should a senior have long term care insurance already, then they are probably familiar with how it can help with the costs of long term care. If one does not have long term care (LTC) insurance but has an immediate need to pay for long term care, this option will not help. Insurers typically do not accept new, elderly enrollees if they are already receiving or in need of care. Even seniors not requiring immediate care but in frail health are often rejected. If a senior is accepted, the insurance premiums can be very expensive.

Rather than discuss the benefits of long term care insurance, this article will focus on what persons who are interested in purchasing long term care insurance should know.

Costs and Benefits

LTC insurance is attractive because the monthly premiums are known in advance and therefore can be built into a budget. Plans are very flexible and can be structured to meet variety of needs.

Plans can cover the costs of in-home care, adult day care, assisted living, skilled nursing or all of them. One may choose a daily or monthly care allowance. For example, a plan can payout $75 / day if the individual resides at home and $200 / day if they are in residential care. Alternatively, one may choose coverage areas, like skilled nursing but not assisted living. In some rare cases, a family member can even receive payments for the care they provide at home.

For healthy seniors, Consumer Reports recommends not purchasing long term care insurance coverage before the age of 60. The older a senior is, the greater the cost of their monthly premiums. This is because there is an expectation that the senior will be paying those premiums for a shorter period of time before they require benefits. Other factors affecting the monthly cost include the benefits covered, the amount of benefit (the “care allowance”), the deductible level and the health of applicant. Younger seniors should expect to pay, at a minimum, several hundred dollars per month in premiums. The cost could be as high as several thousand dollars per month for older seniors.

Tips and Questions for Buyers

In choosing a policy, there are a dizzying number of decisions, options and fine print legalese which can make selecting the right insurance a very tricky process. Follows is a list of some of the considerations of which potential buyers should be aware:

1) Care Allowance – A care allowance is the amount of money a policy will pay out on a daily or monthly basis. If selecting a care allowance plan, consider how the cost of care may change at some unknown point in the future when the care is required. Inflation is a factor to be consider, and the health care costs are rising a rate much higher than inflation.

2) Deductible – What is the appropriate deductible with consideration to the policyholder’s other resources? How might this change in the future? The deductible is how much the policyholder is required to pay out-of-pocket before benefits kick in.

3) Monthly Premium – The premium is much the policyholder must pay each month. What monthly premium can the person afford? Recognize that premiums will increase and it is likely the individual’s income will decrease as they age.

4) Elimination Period – The “elimination period” is the number of days the policyholder must require care before benefits begin . What other insurance coverage does the individual have, and will those insurance benefits sustain them for the elimination period ? For example, most seniors have Medicare which will pay for most of the cost of short-terms stays in nursing homes . But it will not pay anything toward assisted living.

5) Payout Duration – What duration of time should the policy cover? Many policies will pay for certain lengths of time such as 1, 2 or 5 years of care, other policies are unlimited. The average stay in skilled nursing is 2.5 years and in assisted living, 22 months.

6) Daily Allowance vs. Expenses Incurred – Is an indemnity / daily care allowance better for the senior then a policy that covers only the expenses incurred?

7) Policy Cancellation Policy – Should the individual include a non-forfeiture clause that enables a senior to receive money back if they cancel the policy? At what cost?

8) Non-Care Expenses – Should the policy cover medications and/or home medical equipment? At what additional cost?

9) Tax Deduction of Premiums – Is a tax-qualified plan that allows the senior to deduct their premiums appropriate?

10) Partnership Plan – Is a “partnership plan” that allows the senior to protect their assets from Medicaid appropriate?

11) Definition of Care – How is “care” defined by the policy? Is non-medical care included? Companion care? Supervision for Alzheimer’s?

12) Cancellation by Insurance Company – Can the policy be cancelled by the insurance company? Or is renewal guaranteed?

It may be worthwhile to find a long term care advisor / broker that can help determine what one’s future care costs might be and choose a policy that will avoid unpleasant “gotchas” when it is actually needed.

Qualifying for Long Term Care Insurance

Applicants for long term care insurance need to be in good health. Elderly individuals will likely be denied if they already require long-term care or need help with activities of daily living such as bathing and dressing or have any of the following conditions: AIDS, Alzheimer’s, Parkinson’s, MS, any dementia or progressive neurological condition or have had a stroke or metastatic cancer.

Marital status typically does not affect eligibility for long term care insurance though it may affect premiums.

How the Benefits Work

Long term care insurance benefits depend entirely on the policy. Some plans will reimburse seniors and others will make payments directly to the service providers. Most plans require that a professional service take place to receive the benefit. For example, a family member won’t be compensated for the care they give, unless they form a home care agency and provide care through that organization. (Note, the idea of forming a home care agency and being paid by insurance as a family caregiver is not as difficult as it sounds.)

There are plans with annual limits, total dollar limits as well as unlimited plans. One can also choose daily or monthly limits and align those to specific care situations. For example, $125 / day if the individual resides at home and $200 / day if they are in a skilled nursing home.

Most policies have “elimination periods”. This is the period of time after a policy becomes active before the senior is eligible for any benefits. Typically, these are between 20 and 100 days, but some are even longer.

How to Apply / Using a Broker

It is recommended that seniors use the services of a broker / advisor who is not tied to any one insurance provider. This eliminates some of the conflict of interest that long term care insurance salespersons may have. A salesperson might be tempted to sell a more expensive policy that does not necessarily suit a senior’s needs. Typically, there are no fees to use a broker / advisor. These individuals will be compensated by the insurance company when a policy is purchased.

Table of Contents

The Medicaid application process can be complicated, confusing and time-consuming. Any missteps in the application process can result in lengthy delays in receiving an approval or denial from your county Medicaid office. Following these steps will help to make the process less burdensome, less error prone and can reduce the time it takes to receive a determination.

Step 1 – Identify the type of Medicaid for which you want to apply

Each state has its own Medicaid program and within each state there are multiple Medicaid programs targeting different demographic groups with different eligibility criteria. For example, there are Medicaid programs for pregnant mothers, low-income families, seniors seeking assistance at home and seniors seeking assistance in residential living environments such as assisted living communities or nursing homes. The first step is to identify the “eligibility group” for which you or a loved one is applying.

For the vast majority of seniors in most states, there are 3 relevant eligibility groups.

1) Nursing Home Medicaid – also called “Institutional Medicaid”, provides for nursing home care only
2) Home and Community Based Services / Waivers – sometimes called “HCBS Waivers”, provides care at home, adult day care, adult foster care homes, or in assisted living
3) Aged, Blind or Disabled Medicaid – sometimes called ABD or Regular Medicaid, provides care mostly at home and occasionally in assisted living or adult foster care homes

Step 2 – Determine if the applicant is “automatically eligible”

Once the specific Medicaid program has been identified, the next step is to determine if the applicant is automatically eligible for benefits or if the Medicaid candidate will need to work with a professional Medicaid planner to become eligible. Eligibility rules are complex and confusing at best. There are 3 relatively simple approaches to determine if you or a loved one is eligible 1) Read national guidelines 2) Read state specific guidelines 3) Take a non-binding Medicaid eligibility pre-screen.

A fourth, somewhat slower and more labor-intensive approach exists. One can contact their state Medicaid office and inquire. However, one should take this approach with caution. Medicaid eligibility should not necessarily be thought of as a black and white issue. When it comes to eligibility, if one does not meet the strict eligibility criteria, one should ask what can be done to become eligible? What other pathways to eligibility exist? Typically, when contacting a state Medicaid office, these alternative pathways to eligibility are not discussed. Find your state Medicaid office.

Although specific only to assets, one might use a spend down calculator to determine if they have assets over Medicaid’s limit, and if so, how much must be “spent down” to become asset eligible.

Step 3 – Gather supporting documents to accompany the application

If you determine the Medicaid candidate is automatically eligible for Medicaid, you will need to gather a significant number of documents to accompany the application. It may take some time and effort to gather these documents, as some are required as far back as 5 years preceding the application date. The list below does not necessarily include all documentation that may be requested by a state’s Medicaid agency.

Medicaid Application Supporting Documents (Updated Feb.2021)
Financial Account Statements Most recent monthly or quarterly statements from all the applicant’s financial accounts including all bank, investments, IRAs, 401Ks and / or annuities. In addition, 5 years of year-end bank statements for each account. Learn about 5 year lookback.
Social Security Administration Letter Letter from the Social Security Administration that shows the amount of gross Social Security income & deductions the applicant receives.
Income Verification Letter(s) or Tax Forms Income verification letters or tax forms that document all income streams including: wages, pensions, royalties and / or interest. These come from the payer of the income.
Proof of Health Insurance Coverage and Costs Recent statement showing the amount of the health insurance premiums and documents which evidence the types and amounts of coverage such as Medicare, Part D and Supplemental Insurance.
Family Trust Documents List of the items and assets in the trust and beneficiaries.
Proof of Life Insurance Assignment If relevant and lists beneficiaries
Durable Power of Attorney If a POA exists and letter of incompetency if POA is springing
Funeral Trust Document If relevant and lists beneficiaries

Step 4 – Identify your appropriate Medicaid office

Although Medicaid is a joint federal and state program, in most states, the responsibility for application review lies with each specific county. Connecticut is a notable exception, as all long-term services and supports applications go through one of four designated application centers. Illinois has regional offices, and Indiana delegates partial responsibility for document gathering to its Area Agencies on Aging. The Medicaid.gov national site maintains an updated list of links to state, county and regional Medicaid offices. Click here to find your local Medicaid office.

Step 5 – Complete the Medicaid application

Almost all states allow applicants to submit an application and supporting documents in person, by mail or online through a web-based application. Most states encourage individuals to use the online application and typically an online application will result in a faster determination time. Find your state Medicaid website here.

Step 6 – Waiting on your determination letter

Medicaid offices, by law, have a maximum of 90 days to review a Medicaid application, make an approved / denied determination and to notify the applicant. However, there is no way for applicants to enforce this law and sometimes state Medicaid offices do take longer than 90 days. This period in which an applicant is waiting for a Medicaid determination is called “Medicaid pending”. More information about receiving care while Medicaid pending is available here.

Step 7 – Determination letter review

When you receive your Medicaid determination letter, regardless of if the applicant has been approved or denied Medicaid, it is of vital importance that you closely review the determination letter. By some professional Medicaid planners estimates, between 25% and 35% of all Medicaid determination letters contain errors made by the Medicaid application review staff. These errors can be minor such a calculation of the share-of-cost (or patient responsibility), or they can be more critical like an error in the calculation of how much money one spouse is permitted to retain when the other spouse enters a nursing home. Outright denial of Medicaid benefits when the applicant is, in fact, eligible is not an uncommon error. In these cases, an appeal is required.

How to apply for long term care insurance

At some point, older adults may need help completing basic activities like getting dressed and taking baths. Unfortunately, health insurance plans don’t exactly cover this kind of care. This is where long-term care insurance comes into play. If you’re not sure how it works, here’s everything you need to know about the best time to apply for long-term care insurance and why you might need coverage.

What Is Long-Term Care Insurance?

Long-term care insurance refers to coverage for seniors that lasts for an extended period of time. It can be particularly beneficial to adults with a debilitating illness or a chronic health condition. Many types of services fall under the umbrella of long-term care insurance, including adult day care, nursing home stays and care provided by a home aide or an assisted living facility.

If you’re planning to use Medicare to cover the cost of your long-term care, you’ll quickly realize that it won’t provide enough coverage. Under Medicare, you’ll have access to some home health services, short-term nursing home stays, temporary long-term hospital care and hospice care for six months.

But Medicare won’t cover the cost of personal care or help with completing activities of daily living. That’s why you might need to apply for long-term care insurance.

Should You Apply for Long-Term Care Insurance?

How to apply for long term care insurance

This can be a difficult question for adults to answer. Predicting whether you’ll contract a disease or become disabled when you grow older can be nearly impossible, even if you know you’re genetically predisposed to develop a certain medical condition.

Part of the problem with long-term care insurance is the fact that it’s usually expensive. After all, senior care isn’t cheap. The median annual cost for homemaker services was $45,760 in 2016, according to Genworth Financial. A private room in a nursing home costs $92,378, on average. Average long-term care insurance premiums cost thousands of dollars.

Medicaid is one alternative to long-term care insurance. But it’s only available to low-income individuals. Does that mean you’re stuck buying a long-term care policy?

Research indicates that most people don’t need to apply for long-term care insurance. While many seniors will need access to some form of extended care, some studies suggest that these services are often only necessary for a short period of time. A recent report from the Center for Retirement Research at Boston College said that only 20% to 30% of singles needed to invest in long-term care insurance.

If you can afford to pay for long-term care insurance premiums, it may be worth purchasing. A general rule of thumb says that you shouldn’t apply for long-term care insurance unless you have at least $200,000 in assets.

When to Apply for Long-Term Care Insurance

If you’ve decided that you want long-term care insurance, it’s best to enroll in a policy sooner rather than later. According to the American Association for Long-Term Care Insurance, the best time to apply for long-term care insurance is in your mid-50s. Its website states that insurance rates tend to rise 2% to 4% each year for adults in their 50s and 6% to 8% each year for adults in their 60s.

Insurers take many different details into account when deciding whether to offer someone insurance coverage. If you’re an older adult and your health isn’t great, you could be denied a policy. If you are eligible for coverage, you could get stuck with high insurance premiums.

Your best bet is to buy long-term insurance coverage while you’re still relatively young and healthy. That way, you’ll qualify for premiums that are more affordable.

How to Enroll in a Long-Term Care Insurance Plan

How to apply for long term care insurance

Before applying for long-term care insurance, it’s important to compare policies and rates. You’ll also need to figure out how much insurance you need. Some companies that offer long-term care insurance include Northwestern Mutual, Genworth Financial and Transamerica.

You can call and ask for a quote. Then you can speak with an insurance agent who can help you find a long-term care insurance product that meets your needs. Once you’ve purchased a policy, you usually can’t access your benefits until you’re unable to complete two or more activities of daily living (such as dressing, eating, bathing and walking).

Bottom Line

Deciding whether to buy long-term care insurance can be difficult. You may have to pay a hefty premium for services such as home health assistance and custodial care. If you realize that you want to purchase a policy, experts say you’re better off buying one when you’re younger and your insurance premiums don’t cost as much.

Qualify For Long Term Care Coverage

Long term care insurance (LTCI) is underwritten by insurance companies, and premiums are based on your age and health history.

If you wait to apply, the cost for coverage rises each year. Once you’re insured, your premiums are locked in at the age you buy and do not increase each year simply because you age.

Equally important is the health screening process to be approved. Certain medical conditions may make you ineligible for coverage, so it’s important to apply for insurance before an unforeseen injury or illness makes you uninsurable.

Keep reading to learn how to qualify for long term care insurance and other factors that go in to the process of obtaining coverage.

HEALTH SCREENING AND UNDERWRITING

When applying for coverage, many insurance carriers require a telephone health interview and will request to review your official medical records. Depending on your age and health issues, a face-to-face assessment in your home may be required too.

The underwriting process typically takes from 4 – 6 weeks depending on how quickly your medical records are received and reviewed.

It is important to know what your doctors may have written in your medical records. Just as you can check your credit score, you have the right to check your medical records too.

You can get a copy of your medical records from the Medical Information Bureau (MIB) and request access to your prescription drugs records (another point carriers will reference during underwriting) from your state Prescription Drug Monitoring Program (PDMP).

How to apply for long term care insuranceIt is important to know what your doctors may have written in your medical records.

Cognitive impairment such as dementia and Alzheimer’s are a few of the main reasons people purchase LTCI, so insurers pay close attention to these medical diagnoses. If an applicant has any indication of cognitive impairment in their medical records, carriers will use standardized tests during the phone or face-to-face interview. The tests are the Minnesota Cognitive Acuity Screen (MCAS) and the Enhanced Mental Skills Test (EMST).

The MCAS test contains a variety of exercises including delayed word recall, naming and number sequences, and comprehension questions. The EMST tests applicants on word driven recall exercises.

Helpful Hint: To speed up the application/underwriting process, call your doctors to let them know you applied for long term care insurance and provide the name of the insurance carrier. Ask them to respond to medical record requests promptly to avoid delay.

COMMON CONDITIONS & REASONS FOR INSURANCE INELIGIBILITY

Top Reasons for Decline:

Common Diagnoses Declined:

  • AIDS/HIV+
  • Alzheimer’s
  • Amputation due to disease
  • Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s Disease)
  • Cancer of bone, brain, esophagus, liver, pancreas , stomach
  • Cirrhosis of the liver
  • Congestive Heart Failure (CHF)
  • Cystic Fibrosis
  • Dementia
  • Frequent/Persistent forgetfulness or memory loss
  • Huntington’s Chorea
  • Chronic Kidney Disease
  • Metastatic Cancer (spread from original site)
  • Multiple Sclerosis
  • Muscular Dystrophy
  • Organ Transplant other than kidney or cornea
  • Organic Brain Syndrome
  • Paralysis
  • Parkinson’s Disease
  • Scleroderma
  • Schizophrenia or other forms of Psychosis
  • Systemic Lupus
  • Transient Ischemic Attack (TIA) within 2 years or more an one TIA

How to apply for long term care insurance

Tobacco Use:

The following information shows how some of the top LTC insurance carriers rate occasional tobacco use.

Company 1 – Nicotine

  • No use of nicotine or nicotine substitutes in the past 5 years = Preferred Best health rating
  • No use of nicotine or nicotine substitutes in the last 3-5 years = Preferred health rating
  • No use of nicotine or nicotine substitutes in the last 1–3 years = Select health rating
  • Current or within the last 12 months = Standard health rating
  • Occasional cigar use (12 or fewer per year) is considered non-nicotine if nicotine test is negative.

Company 2 – Tobacco Use

  • Within 2 years = Standard health rating
  • Within 1 year in combination with co-morbid condition = Class 1 health rating or decline
  • Celebratory cigar up to 1 per month = Standard health rating – may qualify for a Preferred health rating if all requirements listed under the Preferred Rate Criteria are met.

Company 3– Tobacco Use

  • No tobacco/nicotine use within the past 24 months, including occasional cigar or pipe use, and tobacco chewing = Preferred health rating

HEALTH RATINGS

The majority of people who apply for long term care insurance receive a Standard health rating. If you are given a clean bill of health, you may qualify to receive the best possible rates, which are sometimes referred to as preferred health rates, although the name may vary by carrier.

The insurance carrier will determine your health rating during underwriting and the rates that are offered to you are priced accordingly. Substandard or higher risk rate classes are available with some carriers based on the diagnosis or treatment of conditions. You may be issued a policy, but the premiums are much higher.

PROFESSIONAL LONG TERM CARE PLANNING

Insurance carriers have different underwriting standards. So, it’s best to work with a professional who knows where and how to find the carrier that offers the best chances of getting you covered. A long term care insurance specialist will shop the marketplace on your behalf to save you valuable time and money.

Don’t delay. Take advantage of your good health today. Request a quote >>

So you’ve decided on what plan to choose and you want to move forward. What exactly is the process like to apply for Long Term Care. Do you want the good news or bad news first. The bad news is. hey it’s insurance and that can be a process. The good news is that the carriers are slowly improving the process and we even have the advent of online apps starting to come onto the market. This is a huge deal considering how conservative insurance carriers tend to be. Let’s walk through the process as it stands with the knowledge that a crucial role we play is to guide the process for optimum speed and ease.

The first step is the application. It’s a fairly straight forward form although a bit lengthy. It consists of a section with the expected general information about you, plan options, and the health history section but there are some tweaks in LTC apps. For one thing, there’s commonly a section to verify that you can afford the coverage over the long haul or at least make sure you have thought it through. This section is really to protect a person from enrolling in a plan that they really shouldn’t be in. There’s also a section regarding replacement of of existing LTC policies to make sure someone again, is not making a decision against their interest. The bulk of the application pertains to health history. This section is never fun but it’s pretty straight forward and we’re happy to help with any questions you may have.

The policy choice and options is a little more involved in that there may be many riders that you’re probably unfamiliar with. It’s probably best to contact us with these rider options as each carrier’s take on them is slightly different and you want to make sure not to increase your base premium with too many “nickel and dime” options that ultimately add up to real dollars. We will be consistently adding new articles on these Long Term Care rider options go give you as much background as possible.

Another important section deals with your policy settings. We have written extensively on each of these but give a quick synopsis. You’ll usually choose a maximum benefit, either in the form of a daily maximium amount (such as $150) or a monthly maximum amount (such as $4500). The monthly amount offers more flexibility if offered for an equivalent cost. You’ll also see a section requesting your desired waiting period which is sometimes termed an “elimination” period. This stipulates how long after you qualify for LTC benefits before the actual daily (or monthly) benefit starts. Another policy setting is the Maximum benefit length. This option typically ranges from 1 year to indefinite (or lifetime). The setting dictates for how long you can receive the maximum benefit above (following elimination period). Typically, the inflation protection is the final key setting with usual options shown for simple and multiple percentage points for compound interest. We describe in detail how to compare these options.

If the policy offers some sort of “cash benefit” or split nursing versus home health care benefit, you’ll see a section with these options. Outside of the billing options, expected signatures, and virtual book of fun legal verbiage, this is the core summary of a typical Long Term Care application. It’s usally 25-35 pages. We’re happy to help walk through this process and our assistance can easily cut the process in half.

Once the application paperwork is submitted to us, we will go through to make sure there is nothing that will slow it down. Once submitted to the carrier, we are officially in the underwriting process. Para-medical exams are not generally required for Long Term Care underwriting but APS’s (Attending Physician Statements) can be many and involved. This is essentially the process of requesting medical records from your doctor to further delve or confirm health history/status information. There may be a series of questions and phone interview with the applicant during this process. By far, this is the lengthy part of the enrollment process for LTC.

The carrier will then come back with an offer and you the applicant but either accept the offer (if approved) or decline (or allow to lapse a given time period). How long does this whole process last. It’s not fast. We’re probably looking at anywhere from 30 days to 60 days on average. Beyond the initial application process and some follow phone interviews, much of the work does not require your effort. As always, we’ll be there to help with the process applying for Long Term Care coverage at the most expedited pace

It’s highly unlikely that you can get long term care insurance this late into the game.

Long term care insurance is issued based on the insurance company’s medical underwriting. The insurance company will check your medical history and require that you take medical exams. Only after you passed these qualifications will you be issued a policy.

At the age of 70, passing these qualifications may be hard. According to a survey, 23% of those who are in their 60s fail to meet the criteria while those in their 70s only have a 50% pass rate. You would also be retired from work at this age and thus will not be able to get the coverage through a group plan that employees usually can avail of.

Even if you pass the qualifications, the premiums charged for those in their 70s will be astronomical. And with your limited income at this age, you may be better off setting your money aside for your immediate needs. However, if you really want the coverage, you can turn to your assets and liquidate them so that you can have the finances to pay for the insurance, or to pay for the long term care services themselves.

They say that the best time to get this coverage will be while you are in your 50s to early 60s. At this age, it may be easier for you to pass the medical exams. The premiums may also be more affordable.

Here are some options you can check out to help provide for your long term care needs:

  • Medicaid. If you are eligible for this, it can provide you with a daily allowance earmarked for your long term care fees. However, you need to show that you have very little by way of assets.
  • Using your assets to finance your long term care needs. You can sell your home and move right into a nursing home using the proceeds of the sale. You can also apply for a reverse mortgage, which gives monthly payments for your equity on the house. However, if you want to get a reverse mortgage, the other spouse should keep living on the house.

Qualify For Long Term Care Coverage

Long term care insurance (LTCI) is underwritten by insurance companies, and premiums are based on your age and health history.

If you wait to apply, the cost for coverage rises each year. Once you’re insured, your premiums are locked in at the age you buy and do not increase each year simply because you age.

Equally important is the health screening process to be approved. Certain medical conditions may make you ineligible for coverage, so it’s important to apply for insurance before an unforeseen injury or illness makes you uninsurable.

Keep reading to learn how to qualify for long term care insurance and other factors that go in to the process of obtaining coverage.

HEALTH SCREENING AND UNDERWRITING

When applying for coverage, many insurance carriers require a telephone health interview and will request to review your official medical records. Depending on your age and health issues, a face-to-face assessment in your home may be required too.

The underwriting process typically takes from 4 – 6 weeks depending on how quickly your medical records are received and reviewed.

It is important to know what your doctors may have written in your medical records. Just as you can check your credit score, you have the right to check your medical records too.

You can get a copy of your medical records from the Medical Information Bureau (MIB) and request access to your prescription drugs records (another point carriers will reference during underwriting) from your state Prescription Drug Monitoring Program (PDMP).

How to apply for long term care insuranceIt is important to know what your doctors may have written in your medical records.

Cognitive impairment such as dementia and Alzheimer’s are a few of the main reasons people purchase LTCI, so insurers pay close attention to these medical diagnoses. If an applicant has any indication of cognitive impairment in their medical records, carriers will use standardized tests during the phone or face-to-face interview. The tests are the Minnesota Cognitive Acuity Screen (MCAS) and the Enhanced Mental Skills Test (EMST).

The MCAS test contains a variety of exercises including delayed word recall, naming and number sequences, and comprehension questions. The EMST tests applicants on word driven recall exercises.

Helpful Hint: To speed up the application/underwriting process, call your doctors to let them know you applied for long term care insurance and provide the name of the insurance carrier. Ask them to respond to medical record requests promptly to avoid delay.

COMMON CONDITIONS & REASONS FOR INSURANCE INELIGIBILITY

Top Reasons for Decline:

Common Diagnoses Declined:

  • AIDS/HIV+
  • Alzheimer’s
  • Amputation due to disease
  • Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s Disease)
  • Cancer of bone, brain, esophagus, liver, pancreas , stomach
  • Cirrhosis of the liver
  • Congestive Heart Failure (CHF)
  • Cystic Fibrosis
  • Dementia
  • Frequent/Persistent forgetfulness or memory loss
  • Huntington’s Chorea
  • Chronic Kidney Disease
  • Metastatic Cancer (spread from original site)
  • Multiple Sclerosis
  • Muscular Dystrophy
  • Organ Transplant other than kidney or cornea
  • Organic Brain Syndrome
  • Paralysis
  • Parkinson’s Disease
  • Scleroderma
  • Schizophrenia or other forms of Psychosis
  • Systemic Lupus
  • Transient Ischemic Attack (TIA) within 2 years or more an one TIA

How to apply for long term care insurance

Tobacco Use:

The following information shows how some of the top LTC insurance carriers rate occasional tobacco use.

Company 1 – Nicotine

  • No use of nicotine or nicotine substitutes in the past 5 years = Preferred Best health rating
  • No use of nicotine or nicotine substitutes in the last 3-5 years = Preferred health rating
  • No use of nicotine or nicotine substitutes in the last 1–3 years = Select health rating
  • Current or within the last 12 months = Standard health rating
  • Occasional cigar use (12 or fewer per year) is considered non-nicotine if nicotine test is negative.

Company 2 – Tobacco Use

  • Within 2 years = Standard health rating
  • Within 1 year in combination with co-morbid condition = Class 1 health rating or decline
  • Celebratory cigar up to 1 per month = Standard health rating – may qualify for a Preferred health rating if all requirements listed under the Preferred Rate Criteria are met.

Company 3– Tobacco Use

  • No tobacco/nicotine use within the past 24 months, including occasional cigar or pipe use, and tobacco chewing = Preferred health rating

HEALTH RATINGS

The majority of people who apply for long term care insurance receive a Standard health rating. If you are given a clean bill of health, you may qualify to receive the best possible rates, which are sometimes referred to as preferred health rates, although the name may vary by carrier.

The insurance carrier will determine your health rating during underwriting and the rates that are offered to you are priced accordingly. Substandard or higher risk rate classes are available with some carriers based on the diagnosis or treatment of conditions. You may be issued a policy, but the premiums are much higher.

PROFESSIONAL LONG TERM CARE PLANNING

Insurance carriers have different underwriting standards. So, it’s best to work with a professional who knows where and how to find the carrier that offers the best chances of getting you covered. A long term care insurance specialist will shop the marketplace on your behalf to save you valuable time and money.

Don’t delay. Take advantage of your good health today. Request a quote >>

So you’ve decided on what plan to choose and you want to move forward. What exactly is the process like to apply for Long Term Care. Do you want the good news or bad news first. The bad news is. hey it’s insurance and that can be a process. The good news is that the carriers are slowly improving the process and we even have the advent of online apps starting to come onto the market. This is a huge deal considering how conservative insurance carriers tend to be. Let’s walk through the process as it stands with the knowledge that a crucial role we play is to guide the process for optimum speed and ease.

The first step is the application. It’s a fairly straight forward form although a bit lengthy. It consists of a section with the expected general information about you, plan options, and the health history section but there are some tweaks in LTC apps. For one thing, there’s commonly a section to verify that you can afford the coverage over the long haul or at least make sure you have thought it through. This section is really to protect a person from enrolling in a plan that they really shouldn’t be in. There’s also a section regarding replacement of of existing LTC policies to make sure someone again, is not making a decision against their interest. The bulk of the application pertains to health history. This section is never fun but it’s pretty straight forward and we’re happy to help with any questions you may have.

The policy choice and options is a little more involved in that there may be many riders that you’re probably unfamiliar with. It’s probably best to contact us with these rider options as each carrier’s take on them is slightly different and you want to make sure not to increase your base premium with too many “nickel and dime” options that ultimately add up to real dollars. We will be consistently adding new articles on these Long Term Care rider options go give you as much background as possible.

Another important section deals with your policy settings. We have written extensively on each of these but give a quick synopsis. You’ll usually choose a maximum benefit, either in the form of a daily maximium amount (such as $150) or a monthly maximum amount (such as $4500). The monthly amount offers more flexibility if offered for an equivalent cost. You’ll also see a section requesting your desired waiting period which is sometimes termed an “elimination” period. This stipulates how long after you qualify for LTC benefits before the actual daily (or monthly) benefit starts. Another policy setting is the Maximum benefit length. This option typically ranges from 1 year to indefinite (or lifetime). The setting dictates for how long you can receive the maximum benefit above (following elimination period). Typically, the inflation protection is the final key setting with usual options shown for simple and multiple percentage points for compound interest. We describe in detail how to compare these options.

If the policy offers some sort of “cash benefit” or split nursing versus home health care benefit, you’ll see a section with these options. Outside of the billing options, expected signatures, and virtual book of fun legal verbiage, this is the core summary of a typical Long Term Care application. It’s usally 25-35 pages. We’re happy to help walk through this process and our assistance can easily cut the process in half.

Once the application paperwork is submitted to us, we will go through to make sure there is nothing that will slow it down. Once submitted to the carrier, we are officially in the underwriting process. Para-medical exams are not generally required for Long Term Care underwriting but APS’s (Attending Physician Statements) can be many and involved. This is essentially the process of requesting medical records from your doctor to further delve or confirm health history/status information. There may be a series of questions and phone interview with the applicant during this process. By far, this is the lengthy part of the enrollment process for LTC.

The carrier will then come back with an offer and you the applicant but either accept the offer (if approved) or decline (or allow to lapse a given time period). How long does this whole process last. It’s not fast. We’re probably looking at anywhere from 30 days to 60 days on average. Beyond the initial application process and some follow phone interviews, much of the work does not require your effort. As always, we’ll be there to help with the process applying for Long Term Care coverage at the most expedited pace