Women, Healthcare and Money: How To Improve Your Long-Term Care Insurability

How to Improve Your Long-Term Care Insurability

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Human errors, outdated information, and unnecessary notes in your medical records may cause issues for insurability.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.

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Women and Long-Term Care Insurance: Preparing for Your Future Well-Being

Women and Long-Term Care Insurance

Long-term care insurance is important for a wide variety of individuals to have. But women face a unique set of challenges that often makes it even more important. For starters, women tend to live longer than men after retirement age, which often means women should be financially prepared for more years than the average.

Long-term care insurance can help you become more financially and emotionally prepared for the future. But that’s not the only reason you might consider it. Women are also more likely to suffer from Alzheimer’s disease or dementia, making it crucial that long-term care insurance is there to fall back on when you need it most. The same is true when your partner falls ill, since women often become caretakers for their husbands later in life.

But the truth is that long-term care insurance is complicated, and it isn’t necessary for everyone. So, let’s talk about who needs and qualifies for it, how it works, and the benefits and downsides.

How to Determine if You Need Long-Term Care Insurance

70% of people turning age 65 will need some type of long-term care services in their lifetime. Long-term care services include assistance with activities of daily living. Activities like bathing, eating, medication management, and dressing are some of the most common. There are many different reasons that someone might need this type of assistance. Often, it’s due to an injury, degenerative health condition, or a cognitive disorder like Alzheimer’s.

When you are working with a professional to determine what types of insurance coverage you need, their first question in terms of long-term care insurance might be: is there someone who will take care of you in the unfortunate circumstance that you may no longer be able to care for yourself? As a result, individuals without spouses or children often seek long-term care insurance earlier in life than others.

Who Qualifies for Long-Term Care Insurance?

This may come as a surprise, but not everyone is eligible for long-term care insurance. There are no age requirements for purchasing long-term care insurance. But getting the timing right is crucial because several pre-existing conditions will render you ineligible. A few of these include:

  • AIDS
  • Alzheimer’s
  • Parkinson’s
  • MS
  • Any dementia or progressive neurological condition
  • A stroke
  • Metastatic cancer

If you’re in good health and eligible, the optimal age range to shop for long-term care insurance is between 57 and 65.  Keep in mind that premiums go up as you get older.

How Does It Work?

The benefits and specifics of your long-term care insurance will vary depending on the policy. Some policies involve direct payments to care providers, while others offer reimbursement to the policyholder. Most policies require that a professional service take place to receive the benefit, regardless of the way it is paid out. This means that individuals can’t receive care from a family member and then request compensation. However, if this family member is part of a home care agency, that is a different story.

Benefits and Downsides

There are several benefits to obtaining long-term care insurance. Typically, these types of care plans are flexible, making it easy to structure them to meet a variety of unique needs. Long-term care can take place in a nursing home, assisted living facility, or in your home, depending on your comfort level and other individual factors.

And having long-term care insurance in place when you need it can help you avoid having your post-retirement budget derailed by exorbitant and unexpected nursing home bills. But there are downsides to consider here, too. Primarily, the health restrictions and cost-prohibitive long-term care policy options.

The best way to determine whether long-term care insurance is right for you is to speak with a professional. Everyone is different, and your needs are different, too. If you’d like to speak with a financial planner about how long-term care insurance may fit into your retirement plan, we’d love to chat.

Download your free guide: What Issues Should I Consider When Purchasing Long-Term Care Insurance?

For more information on women and long-term care insurance, check out our recent Financial Finesse podcast episode:

What Every Woman Needs To Know About Long-Term Care Insurance.

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S3 E1: What Every Woman Needs To Know About Long-Term Care Insurance

As You Plan For Retirement, Don't Forget About Long-Term Care Insurance

As women, we have a number of unique considerations when it comes to planning for a financially secure retirement. One topic that comes up repeatedly with my female clients is long-term care insurance–what is it, who needs it, and is it worth paying for? And the answer is: it depends. 

The truth is, long-term care insurance is a complicated issue. While it may make good sense for some women, there are still many factors to consider before purchasing a policy. To help explain the ins and outs of long-term care insurance and clear up some of the more common misconceptions about it, I invited Liz Eshleman onto the Financial Finesse podcast for a very enlightening discussion. 

Liz is a long-term care planning specialist and founder of Eshleman Insurance Services in Sacramento, California. Her mission is to help individuals and families avoid the devastating financial and emotional consequences of not having a long-term care plan in place.

I’ve partnered with Liz on many long-term care planning situations for my clients and could think of no one better to join me for this discussion. I hope you find this episode as illuminating as I did!

Episode Highlights

  • [04:00] Liz explains who long-term care insurance is for and why a mobility issue might cause problems for you, even if you’re otherwise healthy.

  • [07:38] We talk about the impact the coronavirus pandemic is having on long-term care and your eligibility to purchase insurance if you’ve tested positive for the virus.

  • [08:58] Liz lists some of the more surprising health issues that could make you ineligible for long-term care insurance.

  • [14:50] We discuss the various types of long-term care insurance products on the market today.

  • [20:12] Liz gives a real-life example of when and how an initial claim is triggered.

  • [26:00] Liz shares some of the other benefits of long-term care insurance, specifically having access to a long-term care manager.

  • [40:38] We wrap up our discussion by talking about the potential drawbacks of long-term care insurance for women and how it plays into your financial plan.

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Healthcare and Money: Fee Only Financial Planner Discusses Ways to Improve Your Insurability

Buying health insurance when you are self-employed, pre-Medicare, or temporarily jobless.

Remember: An Apple a Day Keeps the Doctor Away | photo
Remember: An Apple a Day Keeps the Doctor Away

The healthcare debate rages on… will the Obama administration succeed where the Clinton Administration failed?  Will the new healthcare system cost you more or less?

Too soon to tell, says this fee only financial planner.

In the meantime, if you’re an individual looking for insurance there are a few critical  things you need to know. Once you leave a group insurance policy, (including Cobra) within which the government prohibits discrimination against people by age or health condition, all bets are off. You will be “underwritten,” which means that an insurance company only offers you coverage if they think they’ll get more from you in premium than they’ll pay in claims (may sound cynical, but true.)

If you can plan ahead for the underwriting process you are fortunate. Most people look for individual insurance when they: 1. retire early and know Cobra will run out before Medicare kicks in. 2. decide to quit their job with health benefits to start a business or freelance. 3. lose their job or a spouse with coverage loses his or her job.  Two out of three of these situations allow for advance planning.

What measures can you take to improve your insurability?

1. Ask your doctor to review your medical records for accuracy.

Human errors happen, a condition you have been treated for may have improved, a code may have been applied to your record to get insurance coverage – you’ll want to get these kinds of discrepancies updated and corrected on your medical records.

2.  Order your MIB report (Medical Insurance Bureau report).

This report is the healthcare equivalent of a credit report.  Instead of tracking your bill paying ability, it tracks your medical history.  The data is created by previous insurance carriers – the very same folks with whom you have applied for individually underwritten life, health or disability insurance.  The insurance carriers use 230 codes to report your health conditions such as high blood pressure, asthma, diabetes or depression, and lifestyle choices such as smoking or high risk activities (sky diving).  Review it and make sure any errors are corrected.  It’s free once a year.

3.  Chronic illnesses cost more.  Work with a doctor to get your weight, blood pressure or diabetes under control.  Start an exercise program and make healthier food choices.

How do you go about shopping for individual health insurance?

1. You can go directly to health insurance companies but my advice, especially if you have a chronic health condition is to use a “non-captive” health insurance agent or broker-one that does not work directly for an insurance company.

2. If you do have a chronic health condition, make sure the agent you choose has expertise in getting insurance for people with your condition.

3. Health insurance agents are paid and incentivized in many ways.  Learn and understand the ways they are compensated. It’s not always transparent.  Ask the questions and insist on answers.

4.If you need help, find a financial advisor that will guide you through the process, many financial planners offer health care planning as part of their comprehensive financial planning services.

Though these proactive steps may seem like a lot of work, they can save you money. And, best of all, they might get you the insurance you deserve.

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