I had my introduction to Long Term Care planning when my sister and I started a Senior Move Company in Southern California. Like many small businesses, we aimed to build our company by attending networking events where we could meet other senior care providers. These events were often sponsored by Long Term Care facilities. Usually, there was some sort of educational presentation and the most common topic was Long Term Care. Intrigued by the information presented, I usually stayed after the event and asked questions about specific care concerns for the LGBT community. Over time, I was introduced to care professionals who specialized in LTC for LGBT and got a crash course on LTC planning for the community.

I became pretty obsessed with the whole topic of insurance so when I started working with a financial advisor she suggested that I get my insurance license so I could handle that side of her practice while she took care of the investments. Because of my background in training and coaching, she had this idea of us doing financial planning seminars and presentations. I liked the idea, so I jumped in and took the Life Insurance exam. Then, when I realized that insurance was only part of the full planning picture, I took the classes and obtained my securities license. That was not enough, I still wanted to get more training and wanted the help I needed to open my own practice. When Northwestern Mutual was there to offer me the opportunity, I took a leap of faith.

When I started working at Northwestern Mutual, my insurance education continued because Northwestern Mutual has products in all 3 lines, Life Insurance (LI), Disability Insurance (DI), and Long-Term Care (LTC). They made sure we knew how to incorporate insurance into a comprehensive plan. When I was doing the training, I put together a strategy to work with my community which is an intersection of dog owners, athletes, female and LGBT veterinarians. That plan worked fine until I moved into the office with the other advisors and started meeting with clients.

You see, these firms set you up by covering your training and expenses during the first couple of years. They also cover your insurance and securities license training and testing. In exchange, while studying and training, you are expected to work with senior advisors who can show you the ropes. And, of course, you get to split your commissions on the insurance until you are ready to go out on your own. Most of the rookies were in their 20’s and 30’s and many of the “senior advisors” were not that much older. This worked out fine for many of the young advisors because they were mostly white males. I wasn’t quite sure how it was going to work for me, a fully licensed 53-year-old lesbian. I would soon find out.

On my very first day in the office, one of the assistants came up to me and asked me for my help. One of the senior advisors was working with an LGBT couple and one of them died. She was a bit beside herself because the whole insurance process with this couple and another couple was less than smooth. She asked me if I could step in and help. You could tell that the advisor and the client were not seeing eye-to-eye, so I ended up working face to face with the clients while the other advisor stayed out of the picture.

A week later, I had my second experience. A lesbian couple I knew was coming in for a meeting. Since this was one of the first meetings I had in the office, it was recommended that I have a senior advisor join me for the meeting. When the couple came into the office, I could feel the eyes watching us as we walked to one of the conference rooms. When the senior advisor joined us in the room, I could tell he thought they were not ideal prospects. My hunch was correct. After the meeting, he told me that I could handle this by myself.

A few days later, I received a referral from an estate planning attorney. She asked me to meet with a friend who was transgender. Her biggest concern was that I used the correct pronouns. After my last meeting, I was not planning on asking a senior advisor to join me, so instead, I approached three of them with a question that was not covered in training. “On the applications,” I asked, “what gender do I select?” I asked this because insurance is based on age, gender, and health. The first advisor said that “They must check the box that matches their birth certificate.” The second advisor said, “They must check the box that matches their driver’s license.” The last advisor said, “I wouldn’t know and quite frankly, I don’t ever think I would take a meeting with someone like that.”

Fortunately, I called the home office underwriters before I met with him and they said that they underwrite based on actual gender, not the gender assigned at birth. They also informed me that other insurance companies still go by gender on their birth certificate. What was interesting was when I went back and told the advisors what I found out. All three thanked me, but the third one added, “I still would never meet with him because I would be very uncomfortable and worried, I would say something wrong.”

People generally buy Life Insurance, Disability Insurance, and Long-Term Care Insurance in one of two ways. They look it up online or they get a referral from a friend. Some people who search online can get information but often end up on the site of a company that spends a lot on marketing. Referrals also can result in you sitting in front of a representative from a big insurance firm.

These companies can be fine if you are healthy and do not have a complex situation. The problem stems from the sales techniques that most advisors are taught. They are very scripted and are intended to find the prospects’ pain. It is done that way to shorten the sales cycle so they can close, get the sale, and move on to the next. That can work fine if you are just like the person on the other side of the table. But it is not easy when you meet with someone who doesn’t look like you or doesn’t understand your needs or values. It also doesn’t work when they rush or force the sale.

The process of obtaining Life, Disability, or Long-Term Care insurance is not the same as purchasing insurance for your car or home. You cannot go in, pick what you want, and have the insurance in your hand when you walk out. Nor would you want to because you want to make sure you get the right policy for your needs. What follows is the process you can expect.

Discovery or Fact-Finding

This is the beginning of the process where you and the advisor get to know each other and discuss what you hope to get out of working together. You talk about your needs, objectives, and goals. You also discuss your finances, lifestyle, health, and family history. Then taking all that information, the advisor does what is called field underwriting. That is, they take all the information and determine what type of insurance you can apply for and the best carriers (companies) for your situation.

This can be where the insurance process ends if something comes up that indicates you are not eligible to apply. For example, right now, if you had a COVID 19 test and were waiting for results, you would not be able to apply until you have completely received the results. This is also where I have seen LGBT turned away because the advisor does not understand how to deal with gender identity. Or they treat gender dysphoria or gender dysmorphia as mental illnesses that are uninsurable.

Once you determine that you can move forward, then the application must be completed. I recommend a trial application, meaning you do everything to complete the application except pay. It takes longer this way, but it does allow for more flexibility later. Many companies will ask you to pay at the time of application which puts the advisor in control of the situation, and it can lead to them choosing the variables based on the wrong assumptions. In fact, that first couple I mentioned at the beginning of this article. The senior advisor gave it to me because he assumed they were uninsurable. I am glad I did not listen because the one wanting to get insurance was healthy enough to get a policy.

I also recommend completing the application with the advisor so that you check the correct boxes and enter inaccurate information. The advisor can also help clarify questions you might have about parts of the application. Oftentimes, I have seen people put in information that was too heavy on details that were not necessary, too light on information where detail is needed or they omit things that end up showing up when medical records are checked. For example, I was once completing an application for a client who was taking Valium because she had muscle spasms in her back. She was worried that they would deny her because of that. But I assured her that if the doctor prescribed it, then they want to know you are taking it exactly as directed. Sure enough, she was approved without a problem. 

Underwriting

This is the part of the process where the underwriters go through all the information you entered on the application and compare against reports from your doctors, insurance companies, prescription records, driving records, and anything else that will help them determine if you are insurable. Some companies check credit especially if you are asking for large amounts of coverage. And if you apply for disability insurance, they will also want to see proof of income, taxes, and in some cases a breakdown of your work duties. If you are applying for Long Term Care, they will also ask you to complete a financial worksheet.

Over the years, the underwriting process has become accelerated and some insurance companies can get the information they need through the application and records. Others will require you to have a paramedical exam. A paramedical exam is where they do a blood draw, take a urine sample, and do a saliva test. Sometimes they also require an EKG (depending on your age and amount of insurance). This test is done by a third-party company and they will come out to your home or office. Many DI and LTC companies will call you and ask you the questions on the medical questionnaire.

The underwriting process can take a few days to a few months. Often, the insurance company will ask for additional records from a doctor or specialist you saw. And, in some cases, your medical provider may require you to fill out a form that will allow them to release records to the insurance company. I have run into some challenges where some providers will not release records because they feel it is confidential information. It is and any of the information they get is treated confidentially and only used to determine insurability. Plus, the exchange of information is done in a way where the health practitioners work directly with the insurance company. The agent or advisor does not get to see any of the records.

One question that does come up is preexisting conditions. Because they are looking at your total health picture, the concept of preexisting conditions is not the same as health insurance. They will be included when you are applying for personal Life, DI, and LTC. This can confuse people because the insurance you can get through your employer is group insurance and it is guaranteed issue. That means that no one is denied insurance based on their health or age.

 

Decision

Once the information is processed, the insurance company will come back with one of four decisions:

2

 Approved with a rating or approval with a table rating.

This is where they come back and offer you a policy, but it may be less than what you want, or it will cost you more. This is called a rating and it happens when something comes up in your medical history that made insuring you more of a risk to the insurance company. They will write a letter explaining why they rated the policy. They sometimes will also reconsider a rating meaning that you have to start the policy at this rating and then in x many years you can come back and get retested to see if they can drop the rating.

4

  Decline with reconsideration

Sometimes, you will get a decline with the option to come back and apply after a specific number of years. We often see this with certain types of cancer.

With COVID-19 we are seeing a 5th option and that is postponement. Since they do not really know what effects COVID is having or what preexisting conditions are problematic, they are holding off for some decisions especially for older applicants.

Payment, Policy Issue and Delivery

When you agree upon and accept the final offer you will need to or pay your initial premium, before the policy will be issued and delivered to you. Depending on how much time you take to decide, you may have to declare that your health has not changed during the underwriting processed. Again, this is another area where you will want to keep in close communication with your advisor.

Service and Claims

The time after the sale is when having an advisor service your policy is most important for LGBT. Even if you bought your policy online or from another advisor it is in your best interest to have an advisor that helps you with your insurance policies. Unfortunately, this is usually the time when many advisors disappear. Some leave the industry or only call you to do some other planning with them.

Life does not stop after you put the insurance in place. People get married, divorced, promoted, become unemployed, or have some other life event. When change happens, your advisor needs to know so they can make sure that your policy will still work for you. If you move to a new state, you need to make sure your advisor is licensed in that state. If you go through a divorce, you may have to keep the policy as part of the divorce decree. If you lose your job or have a financial situation, you will want to contact your advisor before you cancel the policy or stop paying the premiums. In fact, during COVID-19, insurance companies are working with the policyholders and some are not canceling them for nonpayment. But if you call and say you want to cancel then they will follow your wishes. I had one client who canceled their policy in January and then called me to see if they could get it back in June. It was too late by the time they called.

The most important time to have a trusted relationship with your advisor is when it comes to a claim. In fact, it is also a good idea to introduce your spouse, family or whomever you are going to have act as your Power Of Attorney meet your advisor, even if it just for a phone call, shortly after the policy is purchased or you have a change. Chances are you are not going to be the one filing the claim. You don’t want the first time your family meets your advisor is when you go on claim.

Life Insurance, Disability Insurance and Long-Term Care Insurance can be an integral part of a solid financial plan, especially for LGBT families. But you have to trust that the advisor you work with will help you find, what you want, what you need, what you can afford and what you can get approved. They also need to give you options in case you cannot get the type of coverage you want or need. It is helpful to work with someone who is an expert in working with someone like you.