Some Advice For LTC Producers In 2002: Its Time To Upgrade
Much has happened in the long term care insurance environment in the past year.
A number of carriers have decided to withdraw from the marketplace, while others have entered it. Some newcomers have entered with their own product, while others have "partnered up" with existing providers in order to get a feel for the line before making a big commitment.
Of the departing carriers, most left because they were not garnering adequate market share to justify the risk or because their LTC premium volume wasnt sufficient to put LTC insurance on the corporate radar screen and impress the company leadership.
The consensus? In order to be worth a carriers while to hang in the market, LTC insurance has to be a core, not a value added, product line.
I totally agree. This is not a product line in which producers or carriers should dabble. Companies and producers need to specialize in it or, at the very least, give it front burner consideration. Its still very early on in the markets evolution and specialists are very much in need.
Another downside the industry has experienced this past year is that two LTC carriers have run into various problems. Rate increases caused a class action lawsuit in one case, and the cessation of business altogether in the other. Neither situation is good for the industry. Both have the potential of putting a "black mark" on the entire business.
My conclusion from this brief review is that it is time for producers to "upgrade" their approach to the business. Here are some suggestions on how.
Producers must do the best job possible, including performing "due diligence" in the selection of the right plan and carrier for the client.
Which is the best company? I say, it is the one that will be in business at the point of claim. A lot of LTC insurance buyers are now in their 40s and 50s; they need to know that the company they are insuring with has a 50-year or better life expectancy!