Long-Term Care Insurance Guidelines

Consumers purchase long-term care insurance to pay for expenses related to managing chronic diseases and health conditions. People who receive long term care may have been involved in an accident or suffered a stroke. Others may suffer from dementia, Alzheimer's disease or arthritis. Long-term care insurance covers personal care that is not traditionally covered by medical insurance. Most insurance plans provide home health care, assisted-living and skilled nursing services.

Eligibility

• Long-term care insurance is typically provided by private insurance companies or through employer-sponsored health insurance plans. Applicants must meet age and health criteria to obtain a long-term care insurance policy from a private insurer. Applicants who suffer from pre-existing conditions or have recently suffered a heart attack or stroke may be subject to a waiting period for coverage to begin. Also, depending on the age of the applicant, additional eligibility requirements must be met. For example, applicants younger than 50 are only required to complete an underwriting application whereas applicants older than 70 may be required to complete an application, participate in a face-to-face interview as well as provide a statement of health from a physician.

Ineligibility

• Certain factors may result in an automatic decline of long-term care insurance. Applicants who cannot perform daily activities, such as dressing, bathing, eating or getting in and out of bed are usually denied long-term care coverage. Further, applicants who cannot perform other activities without assistance, such as shopping, answering the phone, doing laundry, preparing meals or taking medication, may be ineligible for coverage as well. In addition, certain medications and medical equipment are uninsurable. Applicants who are dependent on medications and equipment to manage serious health conditions and diseases are usually ineligible for coverage.

Types of Policies

• Most long-term care policies are indemnity or expense-incurred policies. Indemnity long-term care policies are designed to pay a fixed benefit amount. Expense-incurred policies allow policy-holders to determine a benefit amount when the policy is purchased. Policy-holders are reimbursed for expenses related to the cost of care per day, per week or per month. Other "pooled" policies provide coverage for a variety of services and benefits and pays up to a certain dollar amount per day, week or month for the amount of care required.

Considerations

• Long-term care insurers review medical records and conduct interviews and investigations to determine an applicant's insurability. They not only review an applicant's current health status, they also look for underlying impairments that would suggest severe health problems and poor risk factors. It is important to note, however, that each long-term care provider has different eligibility criteria. Some may be more lenient than others in determining eligibility and performing investigations into an applicant's health. If you are turned down for coverage from one carrier, carefully consider the factors for the denial and try to correct any issues if they are within your control. Or apply for coverage with another company until you receive a favorable decision.