A previous article warned against waiting too long to purchase Long-Term Care (LTC) Insurance. It’s also important to understand the various reasons why you may be disqualified when you apply for LTC insurance. In fact, according to research conducted by the American Bar Association, people aged 40 to 45 have a 12.4% chance of being denied LTC insurance while people aged 70 to 74 have a 47.2% chance of being rejected.
Your Pre-Existing Conditions
When you apply for LTC insurance, insurers usually review the medical history of you and your family to determine the extent of their risk. Pre-existing health issues like strokes or a cancer diagnosis may either disqualify you for an LTC policy or these conditions may be excluded from your coverage.
Your Age
Many insurance companies will not offer coverage to applicants who have reached a certain age. Even those who are younger than a company’s age limit may end up paying higher premiums due to age. A recent piece published on CBS.com advises buying a policy when you hit age 50 even though you may be a decade or more away from retirement.
Your Recent Hospitalizations, Surgeries & Health Events
If you’ve been recently hospitalized or had major surgery within a certain time period before applying for LTC insurance, you may be disqualified. Some insurers may exclude coverage for recent health events or impose a waiting period before providing coverage for these health issues.
“Remember, without LTC insurance, the out-of-pocket cost of custodial care in a facility or at home can potentially wipe out your TSP.”
Premiums Are Higher When You’re 65 & Older
An article published on Yahoo News indicates that the average cost for a LTC policy with an initial value of $165,000 (and 2% inflation growth) is considerably higher at age 65 than at age 55. LTC insurance premiums are generally higher for women because they have a longer average life expectancy than men.
Before You Buy LTC Insurance, Compare Different Companies
Since different insurance providers have different criteria when assessing applicants for LTC coverage, it’s important to compare before you buy. Policy terms to consider include the duration of LTC benefits, the waiting period before benefits kick in, and the daily maximum your LTC policy will pay for care. Also, look at the conditions required for coverage and whether or not the policy includes inflation protection.
Remember, without LTC insurance, the out-of-pocket cost of custodial care in a facility or at home can potentially wipe out your TSP. Meet with an FRC® trained advisor who can help you shop for an LTC insurance policy that fits your needs.
