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Oct 8, 2015 • LTCI Partners

Six types of LTC Insurance and how they are underwritten


Photo credit: flickr user

It's common sense. The healthier your client is, the less likely they are to use LTC benefits in the short to medium term. The less likely they are to use LTC benefits, the fewer claims the carrier will pay out, and the less expensive long-term care insurance will be.

We tend to view health underwriting as a necessary evil.  In fact, it should be viewed favorably as a way for people to cash in on their good health when planning for long-term care.  Companies have become smarter in the way they underwrite coverage and use tools such as prescription drug records to make a more accurate determination of risk.

In the spirit of "underwriting is good," we've listed LTC product categories and typical underwriting requirements. The plans mentioned below all include the 7702(B) tax-qualified LTC benefits - except for the very last product.


Product Typical Carrier Underwriting Tools How Long Does it Take for a Decision? Comments
Recurring Premium Life/LTC Plans Life and LTC, including para-med, EKG, cognitive screen, medical records, and drug screen In-depth underwriting, can take up to a month Need to underwrite for mortality and morbidity risk
Standalone LTC Insurance Para-med, medical records, phone interview, in-person assessment for older applicants In-depth underwriting, can take up to a month Some carriers don't use para-meds but order medical records on all
Single Premium Life/LTC Plans

Drug screen and phone interview, medical records if needed

Can be very fast (less than a week) or longer if medical records needed  The policy holder is self-insuring a significant portion of risk  - means less risk to carrier
Multi-Life Corporate LTC Plans

Application with knock out health questions

Simplified Issue underwriting - fast Need either employer paid executive group or large voluntary group plan to be eligible
Annuity/LTC Plans 

Application with knock out health questions

Simplified Issue - fast Additional underwriting may result in bigger benefit - but good option for many non-cognitive LTC declines
Point of Need Annuity

In person medical assessment and medical record review

In-depth, could take a month or more With this type of immediate annuity the sicker you are the higher the monthly benefit


As you can see, there is a variety of underwriting types.  If you have a client declined for coverage, consider some alternate solutions such as an annuity/ltc plan. Make underwriting a part of the client planning conversation.


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3 Things to do Before you Present LTCi

Written by LTCI Partners