The Advisor's View of Long-Term Care Planning

How to improve your long-term care insurance underwriting batting average

Posted by Patrick Bradley | Aug 27, 2015 1:00:00 PM


Conversations about long-term care insurance usually revolve around plan design, premium, carrier ratings and optional benefits. In reality, those conversations should start with health history and underwriting.

There are thousands of people who wanted to purchase long-term care insurance but were declined due to health reasons - we see this every day at our agency in working with advisors. Being declined for long-term care insurance affects the applicant and the advisor’s reputation.  In many cases, the applying spouse who is healthy enough for coverage decides to withdraw their application if their partner is declined – a rash decision that can have disastrous impact on the family. Throw in lost time and effort and you can see why avoiding declines is critical.

Carriers aren't making it any easier. Based on adverse claim experience they've added more underwriting.  In addition to phone health interviews, cognitive screening and medical record reviews, we know are seeing  para-meds and prescription drug screens. Some insurers won’t accept people who have been declined by other carriers.

Our goal of course is to get a case placed and not have someone end up with a decline on their record. When we look at some of our declines we see many that could have been avoided by asking a few questions and doing some simple field underwriting. Recent medication changes and upcoming surgeries are two that come to mind.. Here are the scenarios that we come across quite often:

  1. Chronic pain- This one can be tricky because we all have different tolerances to pain, but it is a question that should be asked. . A yes answer to the pain question should result in a couple of follow-up questions. Are they taking any medications for it? What kind, how much and how often. Severe back pain is often treated with narcotic pain medication and that usually makes someone uninsurable. Are they receiving Social Security disability payments? If so - uninsurable.

  2. Diabetes- Because carriers have seen a connection between diabetes adverse claim experience a lot of questions need to be asked: What type? What meds? What is the current A1C reading? Any heart related issues? Height and Weight?  Tobacco? Any nerve or kidney issues? Any visual complications?  Manage expectations with diabetic clients - insurability is very uncertain.

  3. Cancer- Cancer is so varied - it could be not be a problem or it could be a deal-breaker. We want to know stage, dates of treatment, type of treatment, any recurrence or lymph node involvement.

  4. Arthritis- Another condition that is insurable if it’s mild and a decline if it is not. What type is it? When was it diagnosed? What joints are affected? Any joint replacement? Any assistive devices?  Build?

  5. Memory - If someone has ever told a health care provider they are getting forgetful and the insurance carrier reads it in the medical records - they will be uninsurable.  Also, cognitive health screens conducted by the para-med must be taken seriously.  We've seen examples where people didn't and had to either re take them or decided not to pursue coverage.


This is just a few of the biggies and there are plenty more. However, we know that some people do not like to ask health questions, and often clients don’t like to answer to someone they know. It may be most effective to rely on a BGA or other firm to help with the field underwriting.

Follow this advice and you can improve your chances of success.  


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Topics: For financial professionals, Advice articles about planning, Underwriting

Written by Patrick Bradley

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