Q: It’s been my observation that you need to be in good health even to get LTC insurance, correct?
Tom (in response to a newsletter article)
A: When you apply for long term care insurance, you will need to be in decent health, but you don’t need to be perfect. Many common conditions – hypertension, osteoarthritis, high cholesterol, situational depression, etc. – won’t keep you from being insured, as long as they’re well-controlled. What’s of more concern to long term care underwriters are those conditions which are most likely to lead to your needing long term care services in the future. For instance, insulin-dependent diabetes is typically going to be uninsurable for long term care insurance. A history of a stroke or TIA (transient ischemic attack) is going to be very difficult to insure, as will neurological conditions like MS and ALS, or any memory or cognitive problems. Another thing that may prevent you from being covered are “co-morbid” conditions. These are health conditions that, when combined, are even more likely to lead to issues down the road. For instance, if I’m a diabetic with heart disease, or a smoker with high blood pressure I’m not going to get LTC insurance. But most common and routine health issues aren’t a problem.
With that being said, even if you aren’t medically qualified for traditional long term care insurance, there may be other options. Over the past few years, more products have been introduced that can pay for long term care. Here’s an example – I recently helped a client with rheumatoid arthritis (another big red flag for traditional long term care insurance) with a life insurance plan that will let her use part of her death benefit to pay for long term care services. Because of her medications, she’d never get regular long term care insurance. But, because the life insurance policy is underwritten primarily for the odds of her dying, the risk the insurer looks at is different. She now has a life insurance policy that will pay $500,000 if she dies, but she could roughly $300,000 out of the policy to pay for long term care before she passes away. So, this has gotten her a good, solid LTC safety net.
And finally, if you’re not medically eligible for either life insurance or long term care insurance, you may want to look into a few very specific annuity products. Annuities typically don’t require any medical screening, and today, there are a handful that will help you pay for long term care in various ways. One current plan will double your annuity income payments if you find yourself in a nursing home, with no maximum on how much money pays out, even if your money’s entirely used up.
Medical underwriting is a necessary part of the process, so the best time to apply for any insurance is before your health changes. But even if you have some health issues, there may still be ways for you to protect yourself. You need to sit down and talk through this with someone who can help you understand your insurance options, and find the one that best meets your needs. Good luck!
Kerry Peabody, LTC Specialist, Clark Insurance