We originally published this article on July 28, 2009. In the spirit of ongoing financial wellness and the significant changes in healthcare legislation since this article was written, we thought we’d give it a refresh for 2021 and focus instead on how to improve your long-term care insurability.
When I originally wrote this article, the future of healthcare in the United States was unclear. Of course, we now know that the Obama administration successfully passed the Affordable Care Act (ACA), which radically overhauled the individual health insurance market. One of the most significant provisions of the ACA is that insurers can no longer deny health insurance to individuals because of preexisting conditions—a life-changing development for many people.
Still, long-term care insurance providers maintain discretion to deny individuals coverage due to a variety of preexisting health conditions. Since long-term care is often an important consideration for women planning for retirement, it’s helpful to be aware of what can prevent you from qualifying for long-term care insurance and ways you can improve your insurability.
Reasons You May Not Qualify for Long-Term Care Insurance
A number of preexisting conditions are likely to render women ineligible for long-term care insurance. These include Alzheimer’s, Parkinson’s, multiple sclerosis, any dementia or progressive neurological condition, a history of stroke, and metastatic cancer, among others. Conditions like these may not come as a surprise. However, you can also be denied coverage for less obvious reasons, such as not drinking alcohol or being underweight. Health underwriting standards vary from provider to provider, so you’ll want to do your research before assuming you qualify.
In addition, insurability standards can change over time. For example, the coronavirus pandemic presents new potential risks to insurance providers. As a result, testing positive for COVID-19 may impact your eligibility for long-term care insurance. If you’re considering long-term care insurance, you should speak with an expert who can explain these nuances in insurability.
How To Improve Your Long-Term Care Insurability
Ask your doctor to review your medical records for accuracy.
Human errors, outdated information, and unnecessary notes in your medical records may cause issues for insurability. For example, you may have been treated for a condition that’s now improved, or your records may include codes that no longer apply. You’ll want to get any discrepancies updated and corrected on your medical records before applying for long-term care insurance.
Order your Medical Insurance Bureau (MIB) report.
Your MIB report is the healthcare equivalent of a credit report. However, instead of tracking your bill-paying ability, it tracks your medical history. Since previous insurance carriers create the report, you’ll only have one if you’ve applied for individually underwritten life, health, disability income, long-term care, or critical illness insurance with a member insurer within the last 7 years (or less, depending on applicable law).
Insurance carriers use proprietary codes to report health conditions and lifestyle choices such as smoking or high-risk activities (e.g., sky diving). You can request a copy of your MIB report (if you have one) for free. Before seeking long-term care coverage, it’s a good idea to review yours and make sure any errors are corrected.
Work with a medical professional or wellness expert to improve potentially reversible conditions (or prevent them altogether).
Chronic conditions like hypertension, obesity, and type 2 diabetes can affect your long-term care insurability (and potentially lead to more serious problems). However, in some cases you can prevent and even reverse these conditions through proper diet, exercise, and lifestyle changes. Whether you need long-term care insurance or not, taking care of yourself now is one of the best ways to reduce your overall healthcare expenses over the course of your life.
Seek coverage sooner rather than later.
There’s no age requirement for long-term care insurance. However, premiums are based on your age when you apply. While the optimal age to purchase long-term care insurance varies depending on who you ask, most agree that mid-50s to early 60s is the best time to apply.
Research shows that 70% of adults who survive to age 65 eventually develop severe long-term care needs. This makes qualifying for long-term care insurance much more challenging the older you get. Plus, many insurers offer discounts to applicants who are in good health, which is good incentive to seek coverage before a triggering event.
What to Do Next If You’re Considering Long-Term Care Insurance
Long-term care insurance isn’t right for everyone. However, having the right coverage can protect you from depleting your retirement savings if you end up needing unexpected or extensive care in your lifetime. To learn more about why women in particular may want to consider long-term care insurance and the potential benefits and drawbacks, check out our recent blog post and podcast episode on the topic.
And if after reading this article, you’d like to speak with an independent financial planner about whether long-term care insurance makes sense for you, we invite you to schedule an introductory phone call. As a fiduciary, we can give you an objective opinion as to whether this type of insurance is appropriate within the context of your overall financial circumstances.