For advisors, a key question is whether a client is healthy enough to qualify for long-term care insurance (LTCI). Unlike some life insurance policies or Medicare supplements, LTCI is medically underwritten, meaning health, not just age or income, drives eligibility.
How LTCI Underwriting Works
Long-term care insurers focus on one question: Is the client likely to need care soon?
They evaluate medical history and medications, cognitive function, ability to perform daily activities (ADLs), and recent hospitalizations. Clients already showing signs of needing care are usually declined LTCI coverage.
Common Reasons for an LTCI Decline
- Cognitive issues: Alzheimer’s, dementia, or mild cognitive impairment
- Serious illnesses: recent stroke, advanced heart disease, cancer
- Functional limitations: needing help with bathing, dressing, or mobility
Some conditions (like diabetes or high blood pressure) may still qualify if well-controlled and stable.
Read More: How Advisors Can Confidently Respond to LTCI Objections
Who Can Still Qualify for Long-Term Care Insurance?
Clients may be approved if they:
- Have stable conditions (6–24 months)
- Have no recent major health events
- Are fully independent in daily activities
- Show no cognitive impairment
Clients with mild conditions or multiple medications may be accepted by some LTCI carriers but not others. They also may pay higher premiums and get reduced benefits. Shopping carriers is critical here.
Short-Term Care Insurance: A Backup Plan
If a client is declined for LTCI, short-term care insurance (STC) can help. STC offers benefits for up to 12 months, has more simplified underwriting than LTCI, and may be available even after an LTCI decline, depending on the state. STC is best for clients who have moderate health issues and would like to have some coverage rather than none.
Case Study
Client A (58): Controlled hypertension, fully independent
→ Approved for LTCI at standard rates
Client B (64): Insulin-dependent diabetes, mild neuropathy
→ Declined for LTCI, approved for Short-Term Care
- Health, not wealth, determines eligibility
- Cognitive and functional status are critical
- Stable conditions can still qualify
- Always have a backup plan like STC
The best time to plan is before health declines. Advisors who understand underwriting and offer alternatives like short-term care insurance can provide significantly more value to their clients.
Are you interested in learning more about LTCI underwriting and how to pivot to alternative planning options? Don’t miss our webinar on May 21, Extended Care Coverage for the Allegedly Uninsurable, hosted by Carolyn Vader and Holly Westervelt.