If your client was declined for long-term care insurance (LTCI), what can or should you do next?
Keep in mind that what you do in these situations can speak volumes about your professionalism and thoroughness as you present yourself as a long-term care consultant rather than a salesperson.
It’s imperative to know from a planning standpoint what options might still be available for your client and which ones won’t work.
First of all, are they uninsurable with all long-term care insurance companies?
Remember that underwriting standards vary from one company to the next so even though your client was declined by one carrier, the client might have a chance at another one.
For instance, if your client had a stroke a number of years ago, some carriers will not make an offer to that client under any circumstances no matter how long ago the stroke event took place. Others may actually still make an offer after an acceptable period of stability.
So make sure you know what the lay of the land is within the industry.
Ideally, uncovering these kinds of deal breaker medical histories is the kind of informal field underwriting that you should inquire about before an application ever gets submitted so as to reduce or eliminate the possibility of an unnecessary decline and the ensuing application fatigue for your client…..and you.
Some medical conditions will be permanently uninsurable, but others with enough recovery and stability time might be considered in the future. You should if possible provide your client an estimate of the timeframe when they might be able to revisit LTCI in the future so they can include it in their plans. Furthermore, insurance companies from time to time change their underwriting standards and in some cases improve on the offers they might be able to make from what their standards were previously.
If your client is still uninsurable with just about any insurance company, what are some of the next possible steps?
For awhile, it looked as if a component of the Patient Protection and Affordable Care Act of 2010 (PPACA), the Community Living Assistance and Support Services (CLASS) program, would create an option for uninsurable individuals. The U.S. Department of Health and Human Services has now given up on implementing the program, and that means uninsurable and hard-to-insure individuals will no longer be able to use it as a fallback.
Most of the hybrid LTC insurance products that are life-insurance-based or asset-based combinations have their own knock-out underwriting questions, so these products probably aren’t available either for most uninsurable clients. But you might want to double check to be sure.
If your client is working and starts a new job with an employer that offers LTC insurance benefits on a guaranteed-issue basis or with limited underwriting, your client may be able to obtain coverage this way. This is usually an offer provided to a new employee for a very limited timeframe.