A “perfect” long-term care policy?

If you could design “perfect” long term care coverage for yourself, what would it look like?

I recently asked someone this question and she said:

“It should have premiums that are guaranteed to never go up.  It should be able to return most, if not all, of my premiums to my heirs if I never need long-term care.  It should have some type of cash value so that if I decided to cancel it for any reason in the future I could get most, if not all, of my money back.  It should give me the choice to receive my care at home and not just in a facility.”

What most people don’t realize is that policies like this are available and have been available for many years.

To learn more about this type of policy, contact me at:


Should You Buy Long Term Care Insurance? Pros and Cons.

Most of what I find on the internet about long-term care insurance is, to put it mildly, terribly miss-informed.  This recent article from a website that rates retirement communities was surprising balanced.  And the comments by members at the end of the article were very helpful.





One woman who had 3 different outcomes when she applied for long term care insurance.

Recently one of my associates asked me about a client of his who had been declined for long term care insurance.  She’d applied for coverage with a company that her financial advisor had recommended for her and she was declined because of “sticky platelet syndrome” (SPS).  ”Sticky platelet syndrome” is a blood disorder that is usually treated with blood thinners like plavix or coumadin or aspirin.

After discussions with several underwriters with some of the top long term care insurers, I recommended to my associate that she apply for long term care insurance with two of the leading long term care insurers.  Fortunately, both of them approved her.

One of them approved her with “substandard” rates (which are about 25% higher than their standard rates.)  That insurer also decreased the amount of benefits she had applied for.  She wanted a very long Benefit Period, but they approved her for a little more than half of what she had applied for.

On the other hand, the other insurer approved her with all of the benefits she had requested.  Also, since  she had no other health issues and she met the “preferred criteria” for the second insurer, they approved her with the “preferred health discount”.

What are the lessons to learn here?

1)  Just because you’ve been declined by one long term care insurer, does NOT mean that you’ll be declined by all.

2)  Each of the top ten long term care insurers has a unique way of looking at your health history.  Whichever insurance agent you work with, make sure that he or she knows the unique “underwriting nuances” that each company has.

3)  Just because one long term care insurer approves you with a “substandard” rate, does not mean that they all would.  Each long term care insurer has a unique way of determining who can qualify for the ‘preferred’, ‘standard’, or ‘substandard’ rates.

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Is there hope for someone who has been declined for long term care insurance?

I was reading an online “newspaper” the other day.  There was an article about long term care insurance and the importance of planning for the financial consequences of needing long term care.

I like to read the comments at the end of articles.  I often find the comments more interesting than the article itself.  I was surprised that a number of people left comments believing that only those with “perfect health” could qualify for long term care insurance.  Nothing could be further from the truth!

Since 1995 I’ve helped hundreds of people with health problems obtain quality long term care insurance policies, from highly rated insurers, at affordable prices.  The key is knowing each long term care insurer’s “underwriting nuances”.

For example, one long term care insurer might not insure someone who has had a Transient Ischemic Attack (aka T.I.A. or “mini-stroke”) in the past 5 years.  Whereas another long term care insurer can insure someone who has had a “mini-stroke” just 12 months ago.

An application submitted to the first insurer would result in an automatic declination.  An application submitted to the second company would most likely be approved.

This is an over-simplified example, but it illustrates the central point:  Most of the leading long term care insurers have very different ways of determining who is insurable and who is not insurable.

Is there hope for someone who has been declined for long term care insurance?  ABSOLUTELY!


Headline: IBM stops selling computers–future of computer industry in doubt!

In December of 2004, the company that set the standard for personal computers (remember “IBM-compatible”), stopped selling personal computers.  After dominating the PC market for most of two decades, IBM abruptly left.

No newspaper editor was silly enough to write the headline:

IBM stops selling personal computers–
future of PC industry in doubt!

Yet, earlier this month, after one of the larger long-term care insurers announced that it would stop selling new long-term care insurance policies, “experts” concluded that the future of long-term care insurance was “in doubt”.  The headlines read:

“Long-term care insurance begins to fade away”
“Is long-term care insurance doomed?”
“Is the long-term care insurance market sick?”

IBM made a simple business decision in 2004.  They concluded they were not nimble enough to profit from low-margin, price-sensitive, computer manufacturing.

Insurance companies also make simple business decisions. There are significant overhead expenses to create, market, and underwrite long-term care insurance.

These expenses are incurred regardless of how many (or how few) policies are actually sold.  If sales are too low, the overhead costs per policy make it less desirable for the company to sell new policies.  It’s MicroEconomics 101.

Fact:  More people own long-term care insurance today
than ever before in history.

More than twice as many individuals own long-term care insurance today as did in the year 2000.

The number of individually purchased long-term care policies has increased by 129% in the past 10 years.

Does that sound like a market that is sick?

While some LTC insurers’ sales have been down over the past few years, other long-term care insurers have had double-digit growth.  One of the leading long-term care insurers had a 36% increase in sales last quarter, compared to the 3rd quarter of 2009!

One highly-rated insurer that sold long-term care insurance for nearly 20 years, and then stopped selling new LTCi policies, started selling new LTCi policies again after significantly reducing their overhead and streamlining their business processes (something some insurers will have to do in order to be competitive again in this industry).

Medicaid and the CLASS Act are not the solution to the “long-term care tsunami” headed our way.  Government-approved long-term care partnership policies ARE the solution.

This recent announcement, however, has revived some common misconceptions about long-term care insurance.  In the next few posts, I will address these misconceptions:

  1. Can my long-term care insurance policy be cancelled by the insurance company?
  2. What happens to my long-term care policy, if my insurer stops selling new policies?
  3. How do I know if the long-term care insurance company will still be in business when I need to make a claim?
  4. What happens to my long-term care policy if the insurance company goes bankrupt?
  5. What happens to my long-term care policy if the insurance company sells my policy to another insurance company?

(originally published Nov. 6th, 2010).

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4 Reasons why a 90-day Elimination Period usually makes the most sense

4 Reasons why a 90-day Elimination Period usually makes the most sense:

  1. A 30-day Elimination Period usually costs about 20% more than a 90-day Elimination Period.  If you’re going to spend 20% more premium, you would be better off buying 20% more Daily Benefit.  Would you rather have a policy that pays $200 per day starting on day 31  –OR–  a policy that pays $240 per day starting on day 91?  The premium is about the same for each.  I’d pick the latter.
  2. If you need acute care (e.g. short-term rehabilitative care) most medical insurance policies (including Medicare and Medigap policies) can pay up to the first 100 days in a skilled nursing facility.  With many of the better LTCi policies, those days of care paid for by your medical coverage can count towards fulfilling your Elimination Period.
  3. If you need chronic care, (due to Alzheimer’s, Parkinson’s, Rheumatoid Arthritis, etc…) your care starts off slow and you’ll gradually need more and more care.  You may only need a few hours of care each day for the first 90 days with a minimal out-of-pocket expense.  Alternatively, some policies would allow home care provided by a family member to fulfill the 90-day Elimination Period.
  4. Federal law requires that a tax-qualified long-term care policy pay benefits only when your care is expected to last 90 days or longer.  If your doctor certified that you were expected to recover in 89 days or less, a policy with a 30-day Elimination Period would not pay any benefits.Extra Tip:  Some policies offer a zero-day Elimination Period for care at home. With these policies, the Elimination Period is waived for care at home. Some policies include this feature automatically. Other policies make this available for an extra premium.  With some of these policies, the care received at home can fulfill the entire 90-day Facility Elimination Period.  

What is a “Partnership Qualified Policy”?

Partnership Qualified Policy = A type of policy that allows you to protect (keep) some of your assets if you apply for Medicaid after using your policies benefits. Not all states have these policies.

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