“DECLINED” May Not Mean “UNINSURABLE”
Jeff Stemler, CLU, ChFC, CFP – Sr. VP, Advanced Planning (Asset Marketing Systems)
Your client needs Long-Term Care insurance and you immediately think of a couple of LTC products that are asset based, such as One America’s Asset Care. Asset based products like these are rate guaranteed at the time of issue with no increasing premiums. While the client is looking primarily for long-term care benefits, since these products are actually life insurance products you get both a death benefit and/or long-term care coverage.
You’re very excited and you take the application. You send everything off to the carrier and wait for the policy to be issued. In a few days you get an e-mail from the carrier saying that the case is “DECLINED.” In a panic you call the Asset Life Team – “HELP! Is there anything that can be done?”
The answer is “possibly” and you wonder how that can be if the insurance company has declined the case. By definition they are saying your client is “uninsurable.” Since the original product applied for was life insurance based, it was underwritten for both “mortality” (the likelihood of dying) AND “morbidity” (the likelihood of needing long-term care).
There is an alternative. Annuity- based LTC insurance. These products are only underwritten for “morbidity”, and even though someone is “Declined” for life based LTC, they may still be able to qualify for Annuity based products. However as noted, Annuity LTC products are still underwritten for “morbidity” and if the client has any conditions that would indicate the likelihood of needing extended care, they may not qualify.
So if your client needs options for long-term care coverage, Asset offers a wide range of products from true long-term care and long-term care riders, to single premium life insurance with living benefits, to annuities with income-doublers for home health care.
Talk to our product team today to discuss options to get your clients the extended care coverage they need. (888) 303-8755