What Disqualifies From Long-term Care Insurance: Affordability and Eligibility
What Disqualifies From Long-term Care Insurance: Affordability and Eligibility. Long-term care refers to a host of services to help with “activities of daily living,” such as bathing, eating and dressing. Regular health insurance and Medicare pay for medical expenses. Long-term care insurance can be expensive. It’s generally more cost-effective when purchased before a person turns 60. Kamerpower.com
Your health and age are the biggest factors in determining if you qualify for long-term care insurance (LTCI). Compromised health is a reason many people don’t qualify, but other important factors are that they are applying at the wrong time or with the wrong company based on their health and age.
Buying long-term care insurance is one way to plan financially for a time when you might need to pay for help to take care of yourself. Insurance companies consider certain factors disqualifying or exclusionary when you apply for long-term care insurance.
Disadvantages Of Long-Term Care Insurance
While long-term care insurance can offer significant benefits, it’s crucial to be aware of potential pitfalls. For starters, premiums are usually expensive and may increase over time. You might pay premiums for years and never use the policy. Then, if you can stay healthy and independent in your old age, the money spent on premiums could be seen as wasted.
How to Pay For Long-Term Care without Long-Term Care Coverage
1. Long-Term Care Annuity.
Consider investing in a long-term care annuity, where you make a lump sum payment and receive a consistent, specified income for the rest of your life. Long-term care annuities often include provisions to assist with long-term care expenses.
2. Self-Funding.
If long-term care insurance is not feasible, you can adopt a simple approach of living on a reduced budget to save and invest more. It’s an excellent idea to set aside money regularly for investment purposes, whether through a 401(k), an IRA or a non-retirement investment account.
3. Medicaid
Individuals with limited income and countable assets below certain thresholds may be eligible for long-term care services covered by Medicaid, a government program.
4. Short-Term Care Policy.
Instead of a long-term care policy that provides coverage for multiple years, you can choose among short-term care policies offering coverage for a year or less. While the benefits may not be as extensive as traditional long-term care insurance, having some coverage is better than none.
5. Life Insurance Policy Settlement.
If you currently hold a life insurance policy, pursuing a long-term care life settlement is possible. To do so, you can sell the policy and use the proceeds to cover long-term care expenses.
What Disqualifies You From Long-Term Care Insurance?
1. Age
Some insurance companies have age restrictions and may not offer coverage to individuals beyond a certain age, typically around 80 or 85. The cost of premiums also tends to increase as you get older. Conversely, you can’t be younger than 18 when purchasing coverage.
2. Substance abuse or mental health disorders
Some insurers may decline coverage or exclude certain conditions related to substance abuse or specific mental health disorders.
3. Criminal history
If crimes appear on your personal record, insurance companies might refuse to provide coverage, particularly if you have any felonies in your past.
4. Recent hospitalizations or surgeries.
Insurance companies may impose waiting periods or exclude coverage for pre-existing conditions if an applicant has recently been hospitalized or undergone a significant surgery.
5. Existing disabilities or impairments.
If you already have a disability or impairment that requires long-term care, insurance companies may consider it a high-risk factor and decline coverage.
6. Pre-existing conditions.
Insurance companies often review an applicant’s medical history to assess their risk. For example, if you have certain pre-existing conditions, such as Alzheimer’s disease, Parkinson’s disease or certain forms of cancer, the insurer may decline or exclude coverage for those conditions.
7. Terminal illness.
Individuals with a terminal illness may not be eligible for long-term care insurance, as the policy aims to cover long-term care needs rather than end-of-life care.
8. Cognitive impairments.
Severe conditions like dementia may disqualify an individual from obtaining long-term care insurance. Insurers assess the risk associated with cognitive decline and may exclude coverage for related care needs.
9. Declining health
If an applicant’s health is already in decline, insurance companies may deny coverage or charge higher premiums to account for the increased risk.
Common Insurable Conditions
If you have health conditions, that doesn’t mean you are disqualified from LTCI.
- High blood pressure.
- High cholesterol.
- Arthritis.
- Heart surgery (if fully recovered)
- Diabetes.
Common Uninsurable Conditions with Long-term Care Insurance
- Balance disorder/Gait impairment.
- Cirrhosis.
- Depression (severe or hospitalized in the last 5 years)
- Down syndrome
- Cerebral palsy
- Activity of Daily Living deficits (if you need help with transferring, toileting, bathing, dressing, eating, continence).
- Alcoholism (active).
- Stroke (multiple or residual effects)
- Surgery pending (will review after).
- Ventricular tachycardia
- Alzheimer’s/Dementia
- Amyotrophic Lateral Sclerosis (ALS)
- Drug addiction/illicit drug use (within last ten years).
- HIV positive
- Huntington’s disease
- Muscular dystrophy
- Organ transplant (except kidney)
- Organic brain syndrome
- Osteoporosis with compression fracture
- Paralysis (paraplegia/quadriplegia)
- Parkinson’s disease
- Macular degeneration (progressive/wet).
- Memory loss.
- Mental retardation
- Multiple myeloma
- Multiple sclerosis (MS)
- Pregnancy (current).
Recommendation
- 7 Worst Long Term Care Insurance Companies | Is it worth it?
- 10 Best Insurance certification courses | Types of insurance certifications.
- 15 Best Long-term Care Insurance Companies In USA.
- Top 10 Alternatives To Long-term Care Insurance
