LTCi Planning – Before the App

Long-term care planning requires careful pre-application discussion.  From an errors and omissions (E&O) perspective, it is important that these discussions be conducted prudently and thoroughly to avoid possible legal action at a later date.  Some recommendations from those that provide E&O coverage:

• Ask questions and actively listen.  At regular intervals, summarize what you have heard:  “So, if I understand correctly, you want to…”
• Be sure to take time to document all discussions.
• Uncover and discuss all relevant details regarding personal and family values and where they might live if they need extended care.
• Make every effort to describe and disclose what they are considering buying.  Make sure that you give them a specimen policy or Outline of Coverage (OOC), making reference to specific language regarding benefits, features, riders, what’s covered and what isn’t.
• Not all carriers provide payment of LTC costs in the same manner.  Be sure to provide consumer compliant literature or brochures from the various insurance companies you discuss.
• Coverage design must be customized to meet the particular needs of the people to whom you are presenting.  Critical points of coverage design involve:  1)  The pool of money that will be created and from which LTC claims will be paid;  2) The daily or monthly benefit that constitutes the maximum allowable access to the pool of money for payment of LTC costs;  3) The Elimination Period (similar to a deductible) during which care costs come out-of-pocket, and 4)  Keeping coverage current with future costs (inflation protection).                             

If you are not involved on a regular basis in the sale of long-term care insurance, it might be best to work with one who does.  Split-case work is recommended over guessing how much and what kind of LTC coverage and carrier to recommend to your customers.  Far too often, inexperienced agents “sell the illustration” provided by an LTC carrier or general agency.  That can be disastrous if the insured ends up with a policy that doesn’t meet expectations at claim time.

For customers now receiving the benefits from a policy that they purchased after careful pre-application planning, there can be great satisfaction that a wise financial decision was made. For those who purchased a poorly designed LTC policy with little discussion or customization, their dissatisfaction could become your worst nightmare. Claims of more than $1 million can and do occur.  Selling long-term care insurance is not a matter to be taken lightly.  It is not an off-the-shelf or one-size-fits-all type of sale.  Prudent planning is the key to fulfilling your due diligence and avoiding legal action later.

Check out:  www.agentseotips.com.