Often agents are interested in how the delayed word recall works, particularly since they have no control whatsoever on what happens, and sometimes the client needs some assurance from the agent before the interview that it is not just a fancy trick to keep from having to insure them.
Basically, the procedure is in three parts. Initially the examiner will read aloud a word and at the same time show it to them on a flash card – there are 10 words in all. The applicant is told later that they will be asked to recall the word later (no, they cannot write it down). The applicant is usually asked to use the word in a sentence so that they can show that they fully understand the word. Nothing is written down at this step.
Shortly thereafter (usually no more than 10 minutes after) the process is repeated, and as the interviewer repeats the word and shows the card, the individual is again asked to use it in a sentence, either the same sentence used before, or a similar one. The interviewer records the number of words the applicant was incapable of using in a sentence, and writes down the exact time as there usually is a maximum of 10 minutes between the first process and this process.
After at least 5 minutes has passed, during which time the interviewer has asked various other questions and performed other interview functions, the delayed word recall test is continued. The applicant is asked to recall as many words as they can remember. The interviewer also notices the customer’s responsiveness, alertness, awareness, etc., in recalling these words. The time between presentation of the list and recall is noted.
Is this test tough? Not really, according to an interviewer who gives the test frequently. As often as 90% of the time, the applicants pass this delayed recall portion of the test. Can an agent help a client get ready for the test? Yes.
Some people have been known to use various devices to remember the words, such as putting them into a song and then singing the song when asked to recall the words. Actually happened, and that is fine. Basically, the applicant should try to schedule the interview after they are rested. Tell the applicant to take their time, visualize the word, place it into the context of the room, and don’t get into a big hurry to put it into a sentence. If the word is totally unfamiliar for some reason, such as if English is the second language, it helps to explain that to the interviewer.
The physical part of the interview includes height and weight measurements, with a scale that is produced by the examiner, and very rarely, if any at all, have anyone questioned the interviewer’s scale. Obviously obesity is a problem with LTCI as it is with any health insurance examination.
Blood pressure can be a problem. There is a “white coat syndrome” that is actual and factual and does exist. Some people, who in most other settings or situations are calm and collected, can see a rise in blood pressure, sometimes significantly, as soon as a blood pressure cuff is applied to their arm. Therefore, blood pressure is usually taken twice as they are aware of this “doctor’s office” effect. Usually the higher number (diastolic) is the one that will be higher initially.
Some examiners will tell the applicant what their blood pressure is, although they are not required to do so. If the applicant is taking blood pressure medication and the blood pressure is still high, they are a good candidate for a decline.
It will be nice if bone density scanners become portable, but in the meantime osteoporosis can provide a problem with coverage. Fortunately most women will readily provide the results of their bone scans.
The following underwriting guide is a compendium used by various companies and is used for single impairments which constitute the majority of applications that were declined. Each company has their own guides, and they should be used when possible. This guide is presented as an example but most of the unacceptable impairments listed, would be unacceptable by most companies – but if there is any doubt, check with the underwriting department of the particular company represented.
If an applicant has any or one of these impairments presently, they would not qualify for LTCI.
Activities of Daily Living such as transferring, bathing, dressing, eating, toileting, mobility – if there is any current mental of physical limitation to any of these.
Adult Day Care, if used with the past year.
AIDS or ARC
Alzheimer’s Disease
Amputation due to disease, such as diabetes.
Anemia – severe, chronic or of indeterminate cause.
ALS (Lou Gehrigs’s Disease)
Angina – unstable or episodes at rest within last 6 months, or in combination with any other history of congestive heart failure.
Angioplasty, if performed within the past 3 months (12 months if a diabetic) or in combination with any congestive heart failure.
Aneurysm, cerebral, not surgically treated or with residual limitations.
Arthritis which causes function deficits or if surgery is anticipated.
Asthma
Ataxia
Atrial Fibrillation, symptomatic or diagnosed within lat 6 months.
Back surgery with the last 6 months.
Blindness due to disease or with limitations of ADLs.
Brain disorder, organic brain syndrome.
By-pass Graft (artery), Coronary, Carotid, Femoral, or Renal within last 6 months, or in combination with any history of Congestive Heart Failure.
Cancer – metastasis, spread from original site’ Bone, Brain, Esophagus, Liver, Lung, Ovary, Pancreas, Stomach, or Testes without metastasis within last 4 years; of other internal organs, including Prostate and Breast, without metastasis within the last year. Cancer may be considered individually, depending upon State or Level or other categories, many of which may be accepted after a waiting period or with successful treatment.
Cardiomyopathy symptomatic within last year.
Catheter use.
Cellulitis and hospitalized within last 6 months.
Cerebral Vascular Accident (CVS)
Chorea, Huntington’s.
Chronic Lymphocytic Leukemia (CLL)
Chronic Memory Loss
Chronic Obstructive Pulmonary Disease
Cirrhosis of the Liver
Colitis, irritable bowel syndrome or ulcerative colitis, if active.
Congestive Heart Failure when symptomatic or diagnosed within the last 12 months, of in combination with Angioplasty or heart surgery, asthma, chronic bronchitis, heart attack or angina, diabetes, emphysema or tuberculosis.
Coronary Heart Bypass within last 6 months (12 months if diabetic) or if in combination with any history of congestive heart failure (CHF).
Crohn’s Disease, if complicated, multiple surgeries or steriod use above limits.
Dementia
Depression, multiple hospitalization, suicidal ideation or ECT.
Diabetes Mellitus with amputations or other complications or in combination with CHF.
Dialysis (Kidney). Use of prednisone or dialysis within last 2 years.
Drug or Chemical Dependency, present or within past 2 years.
Emphysema requiring hospitalization, respirator or oxygen use within 6 months, or in combination with current smoking or any history of Asthma, Chronic Bronchitis, or CHF.
Endocarditis that is active, symptomatic, cardionecrosis, or history of cardioversion.
Epilepsy, seizure within the last 2 years or with organic brain disorder.
Fibromyalgia, with chronic pain or fatigue interfering with everyday life, depression, hospitalization.
Forgetfulness, frequent or persistent.
Fractures causing functional deficits.
Gastrostomy within6 months or current use of IV, or total parenteral nutrition for regular or supplementary feeding or administration of medication.
Gout, chronic or active with complications.
Heart Attack within last 3 months (12 months if diabetic), or in combination with any history of CHF.
Heart Transplant
Hemophilia, severe.
Hip Replacement if anticipated or performed within last 3 months.
HIV positive.
Hodgkin’s Disease if active or treatment-free for less than one year.
Home Health Care within the last 12 months.
Hospitalization, current or anticipated.
Hydrocephalus with residual function or cognitive deficits, or shunt replacement within last 2 years.
Hypertension with blood pressure in excess of 180/110, or severe or resistant to treatment.
Instrumental Activities of Daily Living, where partial or total assistance is needed with 2 or more IADLs – telephone, finances, housework, laundry, transportation, shopping, meal preparation, or partial or total assistance needed with taking medication.
Immune Deficiency Syndrome.
Incontinence
Knee Replacement, anticipated or completed within past 3 months.
Leukemia, except for CLL.
Lymphoma
Mechanical Appliances used within 6 months, or daily use of walker, wheelchair, respirator, crutches, quad cane, or oxygen.
Medicaid Recipient (except if state does not allow this exclusion, such as KY)
Medications – determine why the medication is being used and for how long. (Note: this requirement changes continually and the following may not be up-to-date)
Adriamycin Alkeran Artane Cerespan Cognetin
Cognex Coumadin Cyotan Depo-Prova Dilantin
Eldpryl Ergoloid Eskalith Haldol Hydergine
Laradopa L-Dopa Leukeran Lithium Lithohbid
Niloric Pavabid Prolixn Sinemet Symmetrel
Tegretol THA, Tacrine Trental
Memory Loss
Meningioma if present or diagnosed within past 2 years, or with cognitive or functional deficits.
Mental Disorders, psychosis or Schizophrenia diagnosed or treated within the last 4 years.
Multiple Sclerosis (MS)
Muscular Dystrophy.
Myasthenia Gravis.
Nursing Home Confinement current or within past year.
Organ transplant, excluding kidney transplant 5 or more years ago.
Organic Brain Syndrome
Osteoporosis, severe, compression factures, or falls.
Ostomy (ileostomy or colostomy) within the last 6 months.
Oxygen use.
Pacemaker inserted within last 3 months, or continued cardiovascular complications.
Paralysis/Paresis, with ADL limitations.
Parkinson’s Disease.
Peripheral Neuropathy if progressive, painful, uncontrolled or complicated.
Polycystic Kidney Disease
Progressive Muscular Atrophy
Pulmonary Fibrosis
Rehabilitation – physical therapy; occupational therapy; speech therapy; any of which occurred as post trauma or post surgery, or secondary to bone or joint disease, all within the past 6 months.
Renal Failure, use of prednisone or dialysis within last 2 years.
Schizophrenia diagnosed or treated within the past 4 years.
Scleroderma.
Senility or Dementia.
Sjogren’s Syndrome.
Skin Ulcers within last 2 years.
Spinal Cord Injury with ADL limitations.
Steroid Use, Prednisone, Deltasone, more than 10mg/per day.
Stroke (CVA)
Surgery, if the procedure has taken place within the last:
Hip or knew replacement or fracture 3 months
Coronary Artery Bypass Graft 6 months (12 if diabetic)
Pacemaker Implant 3 months (12 if diabetic)
Heart Valve Replacement 6 months
Endarterectomy, Cartoid or Femoral 3 months
Back or Spine 6 months
Other major surgery 3 months
*Surgery that is projected or recommended is not acceptable, including elective surgery with the exception of catraract)
Temporal Arteritis
Transient Ischemic Attack (TIA)
Tuberculosis currently requiring treatment or in combination with any history of Congestive Heart Failure.
Vertigo or Syncope, cause unknown, within 6 moths, or if associated with multiple falls within 12 months, regardless of cause.
Walker, daily use.
Wheelchair, daily use.
Wilson’s Disease.
Considerable criticism has been leveled at a practice known as post-claims underwriting. This underwriting method involves minimal or non-medical underwriting of any individual applying for LTC Insurance, instead deferring serious underwriting until after a claim has been filed for LTCI benefits. With essentially no up‑front medical underwriting being performed before a policy is issued, most applicants are virtually guaranteed to be able to buy LTC Insurance, regardless of their health. However, once a claim is filed and the insurer thoroughly investigates the insured's medical history, that history has sometimes been used to deny benefits at the precise time that the insured needs them.
Normally, reputable insurers do not engage in post‑claims underwriting, recognizing the damage that occurs to the industry and the public when a few renegades behave illegally or unethically. However, a very few years ago, one of the major insurers of Long-term Care Insurance instituted a rapid-underwriting service for competitive purposes whereby most applications would be issued within a week or 10 days. This was highly successful in the eyes of the writing agents, but when it became known that this abbreviated underwriting could be accomplished only with post-claim underwriting, this process stopped. Because of those few, many – if not all - states have passed legislation making post‑claims underwriting illegal, not only for LTC Insurance, but for other types of insurance as well.
More typically, insurance underwriting occurs in advance ‑ before a policy is issued. Still, insurers differ in the depth of medical underwriting performed. An application for insurance usually includes medical questions the agent asks the applicant at the point of sale. In some cases, the answers to those questions alone can qualify the applicant for the insurance. In others, answers to questions on the application result in the home office underwriter asking for additional information and, sometimes, for specific medical tests.
While the requirement for significant medical information is more stringent, there are benefits for both prospective insureds and insurance companies. An insurer that does not accept virtually all applicants, regardless of their medical conditions, is likely to have fewer losses and to be financially sound in the future when the insured makes a claim. This same insurer, then, will not require post‑claims underwriting, which poses inherent hazards for the insured. Furthermore, companies requiring the strictest underwriting are more likely to offer both better benefits and lower rates to those who qualify for their policies.
This can be stressed in any discussion with a prospective insured who may have heard of a competing policy available with little or no medical underwriting. In addition, the agent has a significant responsibility for helping applicants complete the medical portion of an application…completely and accurately. Never, ever, allow or encourage a prospect to omit, hedge or lie about medical data. Stress the importance of full disclosure, indicating that concealed or misrepresented information can result in losing all policy benefits. Some consumer publications advise people not to allow the agent to fill in medical information for them, but to complete this part of the application themselves to be absolutely certain it is correct. Only the applicant knows for sure about his or her medical history, but agents can be (and have been) held legally accountable for errors and omissions on the application.
Part of the home office underwriting procedure involves investigating pre‑existing conditions. An agent must know each insurer's rules for pre‑existing conditions so prospects can be advised in advance. Again, always encourage full disclosure so there is no future basis for denying claims based on pre‑existing conditions. Remember, too, that some insurance companies do not impose policy limits for long‑term care resulting from a pre‑existing condition, provided the insured previously disclosed the condition.
In addition to medical information included in the application, other sources can also provide underwriters with the necessary data to decide whether to issue a long‑term care policy. These sources are the same as those used to gather information for life insurance, disability income, and medical expense insurance.
Preexisting conditions, as covered later, are treated as basic underwriting problems.
An applicant's answers to medical questions on the application sometimes prompt the underwriter to request an Attending Physician Statement (APS) from doctors whom the applicant has consulted in the past. Underwriters often want more specific information than the applicant is able to provide. The APS, requested directly by the underwriter, can provide the details about a particular condition, what treatment was prescribed, how many times the insured consulted the physician for the condition, and the date of its onset.
The APS serves several purposes in providing a complete and accurate picture of the applicant's health. Applicants can and does forget how often the condition required medical treatment. More than one consultation for the same purpose can reflect a recurring condition, one that may result in frequent needs for long‑term care. In this case, the risk to the insurer is greater than for a condition from which the applicant has fully recovered and that is not likely to happen again.
Most applicants lack medical training, which means they are unable to be as precise as a physician in describing medical conditions. For example, an applicant who reports his blood pressure is "a little bit higher than normal" might actually have very high blood pressure from the physician's perspective. Medical doctors can provide more complete, specific, and objective information because their training enables them to classify and codify illness more thoroughly.
Following is a sample of an Attending Physician’s Statement request form as used by a provider of such services to insurance companies.
Underwriting Screening Services
Request Form
Fax #: 000/000/000-0000
Phone #: 000/000-0000
DATE: 11/09/98
TO:___XXX Underwriting Screening Division
FROM: KAREN CRAMER
COMPANY: XYZ LIFE COMPANY
PHONE: 111/111-1111
FAX: 111/111-1111
REQUEST FOR: (please mark appropriate box)
Telephonic Onsite (Face-to-Face)
[ ] Health Interview Only [X ] Cognitive Exam & Health Interview
[ ] Cognitive Exam Only [ ] Paramedical Interview
[ ] Cognitive Exam & Health Interview
FILE: 13000434 SOCIAL SECURITY: 142-21-8538
APPLICANT NAME: SAMSOM SALVATORI SEX: M
ADDRESS: 35 OAKVIEW TERRACE
CITY: MONROE STATE: CT ZIP: 06083
PHONE #: 860/744-7654 BEST TIME TO CALL: EVENINGS
DOB: 2/12/1928 DATE OF APPLICATION: 1/09/1998
COMPANY: XYS LIFE COMPANY AGENT: DONALD K. PIECHART
SPOUSE’S FIRST NAME (if we are interviewing both): ______________________
SPECIAL CONCERNS: __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Another source of medical information about insurance applicants is the Medical Information Bureau (MIB), which is a clearinghouse for medical information previously reported to insurers. Insurance companies that are members of the MIBboth report and receive data from this organization. Applications for insurance include a form disclosing to the applicant that the insurer might request information from the MIB. The insurance applicant must read and sign the form, giving the insurer permission to request data and to report data. This notice also informs applicants about their right to know what information the MIB has on file and reports about them. These rights are covered by the Fair Credit Reporting Act, described in the next section. MIB discloses the contents of its files only to member insurers and, upon request, to a certain individual's physician. The physician then discusses the data with the individual.
Consumer investigative and reporting agencies such as the MIBand others utilized by insurance companies are subject to the federal Fair Credit Reporting Act. This consumer protection law requires investigatory agencies to verify the accuracy, completeness and currency of information maintained on file about consumers. All who use these agencies, including insurance companies, must notify consumers in advance that a request for information will be made. This notification must tell the consumer how to acquire information about the nature of the data on that are on file with the investigative agency and what the consumer's rights are.
The following is a summary of consumer rights under the Fair Credit Reporting Act. Consumers have the right to:
The rights summarized here, as well as all other sections of the Fair Credit Reporting Act, apply not only to insurance, but also to all business transactions that require investigation of and reporting about consumers.
Finally, remember that the insurer's underwriting process begins when an application is submitted. An agent must know the importance of complete and accurate applications. No questions should be skipped or answered incompletely (Few, if any, insurers will accept an incomplete application). Applicants must be urged to be completely forthcoming about current or past medical conditions as indicated earlier.
Study carefully the applications provided by each insurer represented so that it is known in advance what information is requested. If the client is one who has heeded consumer advice to fill in his or her own medical information, go over the data with the individual to be as certain as possible that everything pertinent has been disclosed and that all information the insurer requests is included. It can be explained to the client that this review of the application together will help avoid any problems or requests for additional information once the application reaches the home office underwriter.
STUDY QUESTIONS
1. When an examiner reads a word aloud, shows the applicant the word printed on a card, and later, asks the applicant to recall the word, is part of
A. the delayed word recall program.
B. the paramedical examination.
C. what the agent should do when taking an application.
D. the governments requirements in its battle against illiteracy.
2. When the examiner in the home takes an applicant’s blood pressure,
A. it is always only taken once and that is all that is recorded.
B. they usually take the blood pressure more than once.
C. the examiner will not report any results because it is illegal for them to take the blood pressure of an applicant.
D. they will automatically take 20 points off the diastolic reading.
3. Alzheimer’s disease is not an acceptable risk for an underwriter
A. unless symptoms have appeared within the past 6 months.
B. however state laws require all LTCI insurers to accept these applicants.
C. but the company must pay the claims if it appears after the policy is issued and there has never been any earlier symptoms.
D. therefore an LTCI policy will not cover Alzheimer’s regardless of when it occurs.
4. An applicant for LTCI will never be accepted for coverage if an examiner or underwriter discovers that
A. the insured had smallpox as a child.
B. the sexual orientation of the applicant is such that there is an added exposure to AIDS.
C. either of the parents or a sibling has had Alzheimer’s disease.
D. the applicant must use a wheelchair to “get around.”
5. An applicant for LTCI tells the agent that he is taking gemfibrozil, tetracycline, and coumadin. The agent should
A. continue take the application and send it to the home office for the underwriter to figure it out.
B. as the applicant why they are taking the medicine, and if the agent is not familiar with the drugs, look them up in the company underwriting guide.
C. list the first two drugs as he recognizes them as a cholesterol medicine and a drug used for acne problems. He would not ask about coumadin as he does not want to appear to be stupid.
D. take the application and the first year’s premium as these 3 drugs seem familiar.
6. If an LTCI insurer guarantees a policy issued within 2 weeks and it has a high placement ratio,
A. then the agent should place all his business with them as that really helps sales.
B. not only should the agent place most of his business with this insurer, he should also replace existing business.
C. the agent should never deliver these policies as a good “quick sale” can be ruined by an inquisitive client.
D. this would indicate post-claim underwriting, which is illegal in most states.
7. When taking an application, an LTCI agent should never
A. allow an applicant to lie about medical conditions.
B. take premium from the applicant for the first year, regardless of what the company policy may be.
C. call the applicant by their first name.
D. allow the applicant to reveal personal information regarding their health.
8. Many LTCI companies do not impose policy limits for long-term care resulting from preexisting conditions
A. provided the insured previously disclosed this condition.
B. as it is against the law to even take preexisting conditions into consideration.
C. as they automatically reject any applicant who has been ill for more than 3 days at one time within the past year.
D. as they will just increase the premiums regardless of the condition, and they will never decline a policy because of a preexisting condition.
9. When an underwriter orders an Attending Physician’s Statement
A. they have already decided to reject the application and are just looking for an excuse.
B. this can only benefit an applicant also as sometimes they forget past conditions and medications and an APS cannot show medical information that would adversely affect the application for insurance.
C. they are looking for such things as more than one consultation for the same condition, indicating a recurring condition that may be of concern for LTCI purposes.
D. this is a good indication that the application will be accepted regardless of what the APS shows.
10. The Medical Information Bureau is
A. a clearing house for medical information previously reported to insurers.
B. a federal government department that keeps track of everybody who goes to a doctor or a hospital during their lifetime.
C. a place where primarily surgeons will go for expertise in their specialties.
D. an organization that keeps records on everybody’s credit.
ANSWERS TO STUDY QUESTIONS
1A 2B 3C 4D 5B 6D 7A 8A 9C 10A