Three Simple Steps to Purchasing a Long Term Care Insurance Policy

After you decide to purchase a Long Term Care Insurance (LTCI) policy and protect you, your family and your retirement nest egg, you will be ready to proceed with the application process.

Underwriting guides and standards are getting more restrictive and as a result, the underwriting portion of the policy process can take eight weeks or longer in some cases.

Here are three steps involved when you buy a LTCI policy, which is an important part of financial planning:

Review your Application Carefully

When completing an LTCI application, make sure the information you provide is accurate and you fully understand all of the materials and information. The insurance carrier will then review your application and determine if your answers meet the initial underwriting guidelines.

Prepare for a Phone Interview (and in some cases, an in-person interview)

The insurance company will want to hold an interview with you and in most cases, this is done over the phone. The purpose of the interview is to gather additional details — this may include your employment, hobbies, activities and living arrangements, and will definitely address your health history.

What to have ready

Phone numbers and contact information for all physicians you have seen over the last ten years.
A list of all medications, including anything over the counter (name, dosage, frequency taken and the reason you are taking the meds).
Approximate dates for any hospitalizations or physical therapy over the last 5 years.
A list of any diagnoses, such as cancer, stroke, heart disease or other chronic illness, and the approximate date of onset and subsequent treatment.
Your driver’s license or passport.
A private place to conduct the interview that has minimal distractions.

What to expect during a phone interview

Generally, a 30-45 minute phone health interview will be conducted by a healthcare professional.
It typically includes a cognitive exercise and questions about your medical history.
They will ask if you use any medical equipment (e.g. cane).
The healthcare professional will ask about basic activities that are performed on a daily basis.

What to expect during a face-to-face interview

If an in-person interview is required, which is rare (approximately 1 in 8 of our Gordon Associates clients), it will take place as follows:

The interview will be approximately one hour, focusing on your health.
The location will typically take place in person at your residence.
You will be asked to do some brief memory and cognitive exercises that involve word recall or topics relating to current events.
The healthcare professional will measure your height, weight and blood pressure.

Be Patient

It can take 8 weeks or longer for the insurance company to obtain the necessary information and then make a decision on your application. If medical records are ordered from your doctor(s), this can slow down the process a bit. Your insurance professional should provide you with periodic updates on your application status and assist in moving the process along.

Important Reminders

Ask your insurance agent lots of questions about the insurance companies. Think of Long Term Care Insurance as a financial investment — because it is one — and take plenty of time to make sure you are selecting the right plan.

Be sure to assess:

The cost of premiums and how often you are expected to pay them.
The daily or monthly benefit and whether or not it is sufficient to cover the cost of care in your area.
The lifetime maximum benefit of the policy and whether it is large enough to meet your needs.
Any time limits on the policy (some may only cover a few years of care, while others will stay in effect permanently).

Look at the LTCI plans holistically to make sure you are getting as much benefit out of your premiums as possible. Lower premiums do not always mean you are getting the best deal. Once you have made a decision, sign the application and breathe easy. You have just taken an important step toward securing your financial future.

At Gordon Associates, we have been helping families with Long Term Care planning and claims assistance since 1975. Please contact us for more information about how to buy a Long Term Care Insurance policy.