Are you old enough to remember the Dragnet series that aired from 1951 to 1959? How about Detective Joe Friday’s classic phrase, “Just the facts, ma’am. Just the facts.”
With interest rates so low, have you thought about buying a new home or refinancing your mortgage? Bet you thought it would only take two clicks of your mouse and less than 30 seconds to get the rate.
Surprised when 20 minutes later you were still filling in information so the online quoting tool had enough info to generate a quote?
Things like the asking price of the new home, the amount of your down payment or your home equity, current loan balance, 15- or 30-year term, your age, address, credit score, annual income, balance on credit cards and/or student loans. And the list goes on.
You eventually come up with a quote but it comes with disclosures that may or may not apply to your circumstances.
Just a quote, ma’am. Just a quote.
We get calls all the time asking how much long-term care insurance costs. Our response is whatever you define as an affordable premium is what it will cost. Clients are in the driver’s seat when it comes to cost and coverage.
Much like exploring a mortgage rate, we need information about health, wealth, asset location and financial goals to do a quality job for our clients. We can quote till the cows come home. But that’s not productive or helpful.
We’re not a quoting factory. We’re a consultancy. Yes. We do sell insurance. That’s how we get paid. But we want to be sure that we are recommending appropriate and affordable long-term care funding solutions. And we want to be certain that our clients understand what they are buying.
Health history determines carrier, product and cost
It is your health history that allows you to buy this insurance. Your health history, and with some carriers your families’ health history, will determine insurability or how much coverage is available to you. It’s your income or investments that pays for the insurance.
Carrier underwriting guidelines vary. That‘s just one of the reasons that you want to work with a seasoned insurance producer. There is no point in applying for coverage without a thorough review of health history. Field underwriting is the responsibility of every insurance producer.
You may think that you are in perfect health but will an underwriter? If you’ve not had a physical in the past 24 months including a complete blood workup, how do you know?
We frequently find that clients fail to list medical conditions they are being treated for because the condition is well controlled. Perhaps on medication for years and well controlled, applicants don’t think it’s a condition they are being treated for any longer. That’s why we ask about medical conditions and medications.
What’s important to underwriters
Lots of medical conditions and medications. Among them are co-morbids. This is the term used to describe multiple medical conditions. For example, diabetes and coronary artery disease. One without the other may be insurable. Both together may not be. Tobacco use is particularly important to underwriters and will eliminate the opportunity for a preferred health discount.
More and more today we see build as a challenge. Appropriate height and weight are considered along with age and cognition.
Today many carriers ask if any blood relative has been diagnosed with dementia. It’s the number one cause of claims today accounting for about 35% of claims. Some carriers have reported that over 50 cents of every claims dollar is associated with some form of dementia.
The risk is growing
For years, the government has projected that by the time we reach age 65 that 70% of us will need some assistance in our remaining years. Here’s a scary thought. In the next 10 years the number of individuals age 65 and older will increase to 73 million. That’s about one and a half times the number today!
Most of us think of long-term care as an issue for the elderly. Statistically the risk increases as we age. We’re living longer and the longer we live the greater the chance that we will need some assistance.
What might surprise you is that 43% of those already receiving care in our country are working age adults between the ages of 18 and 64. The primary cause for their care is motor vehicle accidents followed by spinal injuries. The need for long-term care could develop at any time.
Some perspective
Insurance is protection against risk that we don’t expect to happen but if it did could be devastating. Think about the insurance policies you’ve already purchased like auto or homeowners.
Consider how infrequently we hear about a house fire compared to the hundreds of houses we see every day. Of how rarely we experience an auto accident given the number of hours we spend driving or as a passenger in a car.
The risk of needing long-term care is different. Odds are that 70% of us will experience a long-term care event, the cost of which could be devastating. The risk is high and the cost of care is expensive. Do you have a plan?