Here is some startling news; long-term care insurance underwriting has just gotten a whole lot easier. This may not be what you are hearing from other brokerage general agents but the opportunity for business owners and their spouses to qualify for LTCi has taken a revolutionary turn towards the better, easier and faster.
Over the past few months our office has helped agents place standard issue long-term care insurance policies on applicants that, a short time ago, would have been heavily rated or declined altogether. Business owner prospects with diabetes, height/weight issues, heart conditions, previous cancers, as well as combinations of these and other illnesses (co-morbids) are now eligible for high quality long-term care insurance from top-rated carriers. And, there is even more good news; applications have become simpler and policies are issued in a matter of a few weeks not months.
Here is a recent case that we are just enrolling. One of our agents sent in an individual application one what of her key clients. In reviewing the application we discovered a 55-year old man, with diabetes and a history of coronary heart disease. He had had quadruple by-pass about five years ago. The applicant’s list of medications was a veritable pharmacopeia of drugs we hear mentioned on television daily. Normally we might have field declined this case, however, I called the agent and asked the following questions; ‘does this client own their own business and does he have at least two more employees he would be willing to purchase a minimal benefit long-term care insurance policy for” The answer to both was ‘yes’ and we were on our way to a much easier path to LTCi sales success.
It turns out that this applicant owns a small professional service company. His wife and two children work for him; they are all legitimately on the payroll. Our business owner is now purchasing the maximum benefits allowed under this particular plan, $300 per day with a six year benefit, 5% compound inflation protection and 90-day elimination period. The spouse, who is about the same age, had already purchased a policy some years ago so we just added an additional $100 per day/three year benefit plan with 5% compound inflation protection. The two children, both in their early 30’s, will each receive ’starter policies’; $100 per day/three year benefit plus guaranteed purchase option. The total price for all four policies is just over $6,000 per year. Who says long-term care insurance is too expensive’ Lest I also remind you that premiums are 100% deductible and the benefits will be received tax-free’
Sometimes insuring ‘Mr. Big’s’ spouse is our challenge. With ten employer paid lives (this could be five employees and their five spouses) we can secure simplified underwriting on Mr. and Mrs. Big. Even within a group of only five employees we can create classes for coverage allowing us to maximize benefits for the owners and their spouses while purchasing starter plans for other employees. The flexibility is amazing.
There are some underwriting limitations. Employees and spouses with cognitive or ADL deficiencies will not qualify nor will those with dread diseases such as Parkinson’s, AIDS, Multiple Sclerosis, or Lou Gehrig’s. Metastic cancers, a recent stay or recommendation to be confined to a nurse facility, multiple TIA’s and strokes also will preclude some from qualifying for long-term care coverage. However, employees up to age 70 with one of our companies and age 65 with another, who are actively at work and reasonably healthy should make the cut.
Please, do not mistake this as a clarion call to send us your tired, poor, weak and huddled masses; however, you might want to take this as a suggestion to revisit some of the business owner clients where you have struggled with long-term care insurance because of various underwriting issues. Additionally, the simplified nature of the application and issuance procedures should ease your trepidations of putting your valued clients through an underwriting process that is not certain to result in the issuance of a standard issue policy.
How long will these simplified issue long-term care insurance programs be with us? Nothing is forever so there is no time like the present to help your business owner clients and prospects with long-term care insurance.