Long Term Health Care Insurance companies assess risk through a process called underwriting. This evaluation determines the likelihood of issuing you a policy and sets your premium based on factors like your medical history, current health, age, and lifestyle. Insurance carriers employ underwriters to examine your health status and history before making a coverage decision. It’s also worth noting that some employer-sponsored group policies might offer coverage with less stringent or even no individual health underwriting.
The underwriting practices of insurance companies directly influence both your initial and future premiums. Some insurers utilize “short-form underwriting,” a streamlined approach often involving a brief phone interview with basic health questions. These questions might cover whether you’ve received treatment for any significant illness or been hospitalized recently, typically within the last three years. Other companies employ more in-depth “thorough underwriting.” This can involve detailed applications, reviews of your medical records, and potentially even mandatory medical examinations. It’s important to understand that underwriters may decline policy issuance altogether if you have pre-existing conditions considered severely disabling or life-threatening.
Regardless of the underwriting method, you will always be required to answer health-related questions and disclose your medical history during the application process. This allows the insurance company to accurately gauge their risk in insuring you. Providing inaccurate information on your application can have serious consequences, potentially leading to policy rescission or cancellation. Most long term care insurance policies include a “termination of coverage provision,” often referred to as an “Incontestable Clause.” This clause typically allows the insurance company to terminate your policy within the first two years of coverage if they discover errors or misrepresentations in your application. Furthermore, even after this two-year period, the company may still be able to terminate your policy if evidence of insurance fraud is uncovered.
