When we’re caught up in the throes of working, raising children, and running a busy household, it’s hard to imagine a time when we’ll no longer be able to take care of ourselves. But as the years march on, most of us will find we need extra help.

“Research shows a person turning 65 today has a nearly 70% chance of needing some type of long-term care in their remaining years,” said Holly Snyder, president of Nationwide’s life insurance business. “When Nationwide surveyed retirees on what advice they’d give their younger selves, almost a third said: ‘Don’t assume you’ll never need long-term care’.”

Long-term care insurance helps cover the costs of extended care in a range of settings, whether at home or in an assisted living or skilled nursing facility. This coverage can give you the confidence your care needs will be met—without draining your assets or burdening your family. However, getting long-term care insurance is not as easy as just purchasing a policy.

Not everyone is a candidate for long-term care insurance

What’s another thing retirees wish they’d known in their earlier years? Twenty-three percent (23%) of respondents to Nationwide’s Long-Term Care Survey said: “Don’t assume you'll always be healthy enough to be approved for long-term care coverage.”

It’s important to understand that not everyone qualifies for this type of insurance. Since long-term care policies are a significant financial responsibility for insurers, these companies carefully scrutinize each applicant to determine their eligibility and what they’ll pay in premiums. In some cases, certain factors can cause an applicant to be disqualified from buying a long-term care policy altogether.  

Knowing what disqualifies someone from long-term care insurance can help you make smart, informed decisions when planning financially for your future. Below, we look at common reasons someone may be denied coverage, the underwriting process insurers use to evaluate applicants, and tips for improving your chances of qualifying for a policy.

What can disqualify a person from getting long-term care insurance?

Insurance companies use an extensive underwriting process to evaluate an applicant’s health, age, and risk factors. Certain conditions or circumstances can result in a denial of coverage.

Below are the most common disqualifiers of long-term care insurance:

1. Advanced age

Age is a major factor in determining your eligibility for long-term care insurance coverage. According to the American Association for Long-Term Care Insurance (AALTCI), only 12% of applicants between age 40 and 48 had their applications denied or deferred in 2021, compared to 47% of applicants age 70 and older. In 2022, the average annual premium for a 55-year-old single male was $950 (for a policy with $165,000 in benefits). For a 65-year-old single male, the average annual premium for the same policy was $1,700 – 79% higher.¹

It’s clear that waiting to buy long-term care insurance does not pay off. The older you get, the more likely you are to be disqualified—and the more you’ll pay in premiums if you do get approved. Buying a policy as early as possible can increase your odds of qualifying for coverage and getting the best rate available.

2. Pre-existing health conditions or disabilities

When it comes to getting long-term care insurance, your current health matters. In fact, one of the biggest reasons people are denied long-term care insurance is because they have a pre-existing medical condition or disability that makes it more likely they’ll require care sooner.

Some examples of diagnosed health conditions that may disqualify you for long-term care insurance include (but are not limited to):

• Alzheimer’s disease or other forms of dementia
• Parkinson’s disease
• Amyotrophic lateral sclerosis (ALS)
• Cerebral palsy
• Multiple sclerosis (MS)
• Kidney failure
• Obesity
• Hypertension (high blood pressure)
• Sickle cell anemia
• Cardiomyopathy
• AIDS or HIV infection
• Stroke or history of transient ischemic attacks (TIAs)
• Cancer (depending on the type, stage, and treatment history)
• Spinal cord injury
• Chronic illnesses like advanced diabetes or severe arthritis

If you have a medical condition that suggests an immediate or near-future need for long-term care, insurers may view you as a high-risk applicant and deny coverage. Similarly, if you recently experienced a heart attack or had major surgery, your application for long-term care insurance may be denied, or the insurer may impose a waiting period before coverage takes effect.

3. Cognitive impairments

Insurers often conduct cognitive tests during the application process to evaluate mental sharpness. If you exhibit memory issues or other warning signs of cognitive decline, your long-term care insurance application may be denied. This is because disorders associated with cognitive decline (like Alzheimer's disease) tend to require extensive and prolonged care—and that increases the insurer’s financial risk. Mild cognitive impairments don't always mean disqualification from long-term care insurance, but they may lead to higher premiums.

4. Difficulty with daily functioning

Long-term care insurance aims to help you when you’re eventually unable to manage activities of daily living (ADLs) on your own—such as bathing, dressing, toileting, transferring, and eating. However, if you already have difficulty performing ADLs at the time you apply, an insurer may consider you high-risk and disqualify you from buying a policy.  

5. Terminal illness

Long-term care insurance isn’t designed to cover the extensive medical care often associated with a terminal illness. It’s also not intended to pay for end-of-life care (e.g., hospice care), which is often covered by Medicare, Medicaid, and private health insurance plans. That’s why applicants who have life-limiting illnesses such as terminal cancer may be denied coverage.

6. Substance abuse

Years of alcohol and/or drug dependence take their toll on our physical health, and these effects can be compounded by aging. That's why, if you have a history of substance abuse, an insurer may look at you as a higher risk. They might either deny you coverage outright or offer coverage at a higher premium.

The application and underwriting process for long-term care insurance

When you apply for long-term care insurance, the insurer evaluates your eligibility through an underwriting process. This process can take several weeks to complete. Depending on the insurer, it may involve:

• Phone or in-person interview: Some companies conduct interviews to assess your cognitive function and your ability to perform ADLs.
• Health questionnaire: You’ll be asked basic questions about your medical history, medications, and any chronic conditions.
• Medical records review: Insurers may request access to your medical records for a more detailed assessment of your health.
• Cognitive screening: Certain cognitive tests may be used to check your memory, problem-solving skills, and other cognitive abilities. Many insurance companies offer these tests conveniently online.

It’s important to be honest during the application process and answer questions as completely as you can. If you provide inaccurate information or leave out important details, you may be disqualified from long-term care insurance (or eventually have complications with your policy benefits).

How can I avoid being disqualified from long-term care insurance?

While there’s no guaranteed way to ensure approval for long-term care insurance, the following can help you improve your chances of getting the coverage you want at a favorable rate:

1. Apply early: The golden rule of thumb is to secure long-term care insurance coverage well before you have an immediate need for this type of care. The younger and healthier you are when you apply, the better your chances of being approved.
2. Manage chronic conditions: If you have a manageable chronic condition like obesity, high blood pressure, or diabetes, work with your doctor to get it under control before applying.
3. Practice a healthy lifestyle: Eating right, exercising regularly, and getting preventive vaccinations can help you avoid serious health problems that may disqualify you from long-term care insurance. Avoid smoking and excessive alcohol consumption, since those habits can significantly impact your health.
4. Consider hybrid policies: If you’re concerned about qualifying for traditional long-term care insurance, look into hybrid policies like a long-term care insurance rider. A rider is added to an existing life insurance policy to provide additional coverage for long-term care should you one day need it. Underwriting for hybrid policies tends to be less stringent than for standalone long-term care insurance policies.

Questions about qualifying for long-term care insurance?

While long-term care insurance can provide vital financial protection in your later retirement years, not everyone qualifies for a policy. By applying early, managing your chronic conditions, and practicing healthy lifestyle habits, you can improve your odds of securing coverage. A certified financial professional can provide personalized advice on your long-term care insurance options based on your current health, care preferences, and financial situation.

Explore this long-term care insurance guide from Nationwide to learn more about this type of coverage and whether it’s right for you. You can also call Advantage Direct at 1 (855) 529-2729.

Source

1. American Association for Long-Term Care Insurance (AALTCI). Long-Term Care Insurance Facts - Data - Statistics - 2022 Reports. Found on the internet at https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2022.php