WHAT IS THE PROCESS OF SECURING LONG TERM CARE COVERAGE?
The process of securing Long Term Care can actually be quite simple, and contains three phases:
Learn about Long Term Care. What is it? What does is provide? What are the
limitations? You must understand that you will likely pay for Non-Skilled or Custodial
Care at some point. The question is simple. Will you allow such care to deplete your
personal assets or purchase a Long Term Care plan to provide for this care? You must
also understand how federal and state programs may affect your decisions. In most
instances, government resources will only provide Non-Skilled or Custodial Care if you
meet certain minimum income, asset and physical metrics established by the state in
which you reside.
Can you qualify for Long Term Care through the underwriting process? You must
understand the underwriting process fully, and all of the potential steps that could
be involved with securing coverage. Underwriting varies by carrier; please check with
your advisor on this as a result of their discussion of your medical history with you. If
you are a business owner, you may wish to ask your advisor if abbreviated underwriting
might be advantageous for your organization or company. The main consideration of
course, is your health. Unless you have access to an abbreviated underwriting program
through your employer or an organization as referenced earlier; it is likely that you
will go through full underwriting with the carrier that you choose. The underwriting
process for Long Term Care generally employs mechanisms in order to review the
• Your 10 Year Medical History
• Your 10 Year Surgical History
• Prescriptions that you have taken or are taking
The underwriting process for individuals attempting to secure Long Term Care
coverage can take 4-6 weeks. Full underwriting is a detailed process that requires an
extensive medical questionnaire. Abbreviated underwriting can shorten this process
requiring fewer questions and a shortened process.
Fortunately, there are several funding options available to fund your Long Term Care
plan. Funding options vary by carrier and by the state in which the product is filed:
Lump Sum Option consisting of one payment that funds the entire Long Term Care Plan
Defined Payment Period Option setting payments over a fixed period
Lifetime Pay Period Option in which you pay premiums for the remainder of
your life unless you use the services
With both the Defined Payment and Lifetime Pay Period Options, your payments
cease when you qualify and begin receiving benefits.
Within these funding options, you may also tailor the frequency of your payments to best
fit your budgetary needs by paying:
• Semi-Annually, or
More frequent payments result in more premium payments and the difference between
each payment frequency will vary by carrier.
Your Long Term Care advisor should present a detailed process to explain all of the steps
that can be involved with securing Long Term Care. You should ask to review this process
prior to engaging an advisor.
It is critical that your Long Term Care Advisor be informed and prepared to offer you
several options in terms of underwriting, funding and plan benefits such as inflation,
claims payment options and other relevant LTC planning provisions that reflect and fit
your personal financial plan. When it comes to Long Term Care, one size does not fit all.
Corey Rieck is on the Caregiver Communications Board and President & Founder of Long Term Care Planning Group