Companies that sell long-term care insurance
"underwrite" their coverage. They look at your health and health history before
they decide to issue a policy. You may be able to buy coverage through an
employer or another type of group without any health underwriting.
Insurance companies' underwriting practices affect
the premiums they charge you now and in the future. Some companies do what is
known as "short-form" underwriting. They ask you to answer a few questions on
the insurance application about your health. For example, they may want to know
if you have been in the hospital in the last 12 months or must use a wheelchair.
Sometimes companies don't check your medical record
until you file a claim. Then they may try to refuse to pay you benefits because
of information found in your medical record after you file your claim. This
practice is called "post-claims underwriting." It is illegal in many states.
Companies that thoroughly check your health before selling you a policy aren't
as likely to do post-claims underwriting.
Some companies do more underwriting. They may ask
more questions, look at your current medical records, and ask your doctor for a
statement about your health. These companies may insure fewer people with health
problems. Having certain conditions that are likely to mean you'll soon need
long-term care (Parkinson's disease, for example) probably will mean you can't
buy coverage from these companies.
No matter how the company underwrites, you must
answer certain questions that the company uses to decide if it will insure you.
When you fill out your application, be sure to answer all questions correctly
and completely. A company depends on the information you put on your
application. If the information is wrong, an insurance company may decide to
void, rescind, or cancel your policy and return the premiums you have paid. It
can usually do this within two years after you buy the policy. Most states
require the insurance company to give you a copy of your application when it
delivers the policy, At this time, you can review your answers again. You should
keep this copy of the application with your insurance papers.