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Why Agents May Dislike Selling Long Term Care Insurance: Part 1

Long term planningLet’s face it; Long Term Care Insurance can be a very difficult product to sell.  In this 2-part blog series, you’ll read about the difficulties as well as the rewards when selling Long Term Care Insurance.

Several insurance companies that used to offer this product stopped doing so due to the amount of claims they received and the insufficient rates used in respect to expected future claims.   Those that remained in the marketplace, or later entered, have trimmed policy benefits and increased premiums. Hybrid policies were also introduced.

Many prospects believe that Medicare is going to cover all of their long term care needs while others choose to live in denial.  A good insurance agent will take the time to educate any prospective clients so that they know how unlikely it is that they will receive any facility or home care under Medicare, unless it is skilled care – care that helps them recover.

There comes a point in the aging process where there is nothing to recover from as the body is just wearing out and there is no control over how fast that happens.  Those that live with dementia and Alzheimer’s disease are often in decent health and, consequently, require years of care.  Prospective clients need to have these possibilities brought front and center by their agent.  Is their long term care plan a hospital bed in their child’s family room?

People that have worked most of their lives and own their homes often have a very hard time wrapping their head around the concept of paying quite a bit of their hard earned money in premiums, over a period of many years, for a policy that, in their minds, they will probably never use.  Yet, statistics state that after age 65 one out of every 2 people will need some form of long term care.

Agents that devote a lot of time to Long Term Care Insurance must strive to keep on top of the many changes in products that take place among the insurance companies still writing business and be prepared to handle questions about rate increases over the years.

Insurance agents know that they are required to carry E&O Insurance by the companies they represent. This E&O Insurance will defend them against lawsuits that may be made in the future, and will provide insurance for awarded damages and/or settlements.   Unfortunately, when it comes to Long Term Care Insurance, the people that make inquiries aren’t always prepared to apply.  Those that do complete an application, don’t always remember their complete medical history and underwriting can uncover some surprises that either warrant a higher premium or result in a declination.

The insurance agent that sells Long Term Care Insurance must make a commitment to product knowledge, Medicare changes and educating those that are willing to put their toe in the water.

The smoothest sales are to those that have actually experienced all of the trials and tribulations of having to care for someone, or know of someone that has outlived their assets and ended up on Medicaid.  These people are hungry for their insurance agent to educate them and are willing to consider various options to make a plan work within their budget.  They will only need to be re-educated when they receive an increase in their premium, which is why it is important that the agent always takes the time to explain that the premiums will likely increase often as the cost of care continues to soar.

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