LTCI underwriting

The underwriting of long term care insurance (LTCI) includes a review of your client's physical condition, medical history and functional/cognitive status to assess the risk.

Our goal is to insure as many individuals as possible. We may consider applicants with a past history of cancer, stroke, or heart attack for coverage, as long as they have recovered, returned to their normal activities, and their health has remained stable for a specified period of time.

Using the LTCI underwriting tools can help you determine if your client is eligible to apply for long term care insurance. At Sun Life Financial, we want to provide you with clear and concise information to help you achieve the best underwriting experience possible. This information will also help you set the right expectations with your client.

The pre-screening checklist - Identifying uninsurable conditions

The pre-screening checklist can help you determine whether or not a client is eligible to apply for LTCI before submitting an application.

Underwriting requirements

Age Requirements
21 - 49
  • Application
50 - 69
  • Application
  • Phone interview
70 - 80
  • Application
  • Face-to-face interview
  • Medical records

Please note that additional requirements may be necessary depending on the medical history of your client.

Preparing your client for the phone interview/face to face interview

Eligibility requirements

When is a physical exam required?

If an applicant is age 65 or older and hasn't had a physical examination within the last 3 years, they must have one completed (including any tests, lab work and EKG) before they apply. Any expense associated with the meeting of this requirement is the applicant's responsibility.

What is a stability period?

Stability periods are a component of LTCI underwriting. The stability period is the minimum period of time that your client must wait after diagnosis or treatment or both for a medical or physical condition before they qualify for LTCI.

More specifically, a stability period refers to the length of time a condition has been well-controlled:

  • without any change in the condition or symptoms, and
  • without any further treatment or therapy

For chronic conditions: it's the length of time since the condition was diagnosed, treated, and well controlled.

For resolved conditions: it's the length of time since the proposed insured has completely recovered and is treatment free.

The following cases are examples of when a stability period would start:

  • The client has been diagnosed with diabetes. The stability period starts once the condition is under control and stabilized, as evidenced by lab results, as long as the proposed insured continues with regular follow-ups with the doctor and test results have remained within acceptable limits.
  • The client has had surgery and/or physiotherapy due to injury. The stability period starts after the client has completely recovered from surgery, all treatments have been completed and the client is back to their usual day-to-day activities. This may be several weeks/months after the surgery was performed or treatment has ended.

A new stability period requirement starts when:

  • a new diagnosis is made
  • a new medication or treatment is started or added
  • a medication's dosage or treatment is increased or decreased or
  • a medication or treatment is discontinued

Underwriting decisions

Once all underwriting requirements have been received and reviewed, the underwriter is able to proceed with one of the following decisions:

  • approved as applied for
  • modified
  • postponed or
  • regretfully declined

It's important that you establish the correct expectations prior to submitting the application.

  • Due to the nature of this product, more cases are modified, postponed, or declined than would be for critical illness or life insurance.

Approved

This is a policy that is approved as applied for.

Modified

Due to medical history, some clients although insurable for LTCI coverage, will require a modification to their policy.
A modified decision can mean a change to the maximum lifetime benefit - such as changing to a set number of weeks for benefit.

Postponed

A postponed decision means that we are currently not able to offer coverage to the proposed insured, however, there is possibility of future reconsideration if certain criteria are met. For example: during the course of underwriting we find out that your client recently had a change to his/her medication to obtain better control of their non insulin dependant diabetes. Once the condition has stabilized, it must remain stabilized for an additional 6 months before we can consider offering LTCI coverage.

Declined

A declined decision means that the client is uninsurable for LTCI coverage.

The difference between long term care and life insurance underwriting

Life insurance underwriting assesses the risk of premature death and long term care insurance underwriting assesses the risk of becoming dependent on someone else for care. Here are a few example that demonstrate how underwriting for long term care insurance differs from life insurance.

Case specifics

Life insurance considerations

LTC insurance considerations

Case 1:
male, age 40
heart attack at age 35 no symptoms since

High mortality risk since heart attack occurred at a young age; client may be insurable with a substantial rating.

Risk of dependence is much lower than mortality risk; may apply after a 6 month stability period is met

Case 2:
female, age 60
osteoarthritis of the knee awaiting knee replacement

Mortality risk is considered low and the client would be insurable.

Current risk of future dependence is high. May apply 6 months after fully recovered from surgery, completed physical therapy, and returned to all normal activities.

Case 3:
male, age 50
asthma treated with inhaler smoker

Some risk of mortality depending on severity of the asthma. If the asthma is considered to be severe the client will not be insurable.

Respiratory diseases lead to higher risk of dependence, especially for smokers. Would not be eligible to apply for long term care insurance. However, may apply 1 year after quitting smoking.

Case 4:
female, age 71
breast cancer at age 66, 1 positive lymph node at time of diagnosis
no recurrence

A positive lymph node indicates a high mortality risk. Client may not be insurable.

A positive lymph node found at time of diagnosis is considered to be moderate risk for dependence. May apply 36 months after.