To The Editor:
Long Term Care Insurance (LTCI) is a wonderful product…and is (or may be) the financial salvation for thousands of Americans who need expensive LTC services. However, it is a difficult product for many clients to understand, and it is difficult for many agents to grasp LTCIs nuances. Current LTC insurance policies have lots of “moving parts” and it takes competence to successfully (and ethically) market the products.
I teach basic Life & Health insurance classes for new agents to qualify for their licensing exam. Believe me, many of these new agents have significant trouble just understanding the differences between Term, Whole Life, Universal Life, etc. The course barely brushes the issues of Medicare, Medicaid and Long Term Care. And yet, when these new agents get that Life/Health license, they are “fully qualified” by the state to sell LTC insurance. It is absolutely no surprise to me that agents and companies are having problems with LTCI sales. Too many agents are ill-informed about the product, promise too much in their sales talks, and often sell only “price” versus quality and benefits of policies. I know, because I see it every day among my competition.
To me, its a no-brainer. If youre going to sell LTCI, you need to have additional training and special certifications. We dont need to over-regulate LTC insurance, but if the LTCI industry does not regulate itself (e.g., through mandatory certifications), believe me the Feds will step in to do so as the scandals become apparent. Remember the Medicare Supplement debacles of the 1980s? Stand by for news in the LTC insurance industry…there is a real chance that LTCI will take unfortunate hits in public perception, worse than in the early years of the product. Id love to see our industry organizations take the lead in advocating mandatory credentials for LTC insurance agents…now!
One possible approach would be for the National Association of Insurance Commissioners to create common standards for LTC insurance agents in the form of testing and/or accepting credentials as a substitute for testing. As an analogy, many states now accept the CLU professional designation in lieu of licensing courses and exams to acquire a state life/health insurance license. Similarly, states could accept certain designations (e.g., CLTC, CSA, CASL) as an agents qualifications to sell LTC insurance. In the absence of such designations, the agent would have to pass a specific exam to demonstrate competency in the LTC insurance area.
One more word…we cant just trust the LTC companies to train their agents. Its too hit or miss. One company Im appointed with does a great job and requires 4-5 hours of agent training each year to sell their policies. Other companies (big name ones) only require the appointment…no follow-up, no checking into my qualifications to sell the product. Personally, I believe that is formula for future disaster which has potential to squash a wonderful product.
Allen C. (Al) McLellan, LUTCF, CLTC, CLU, ChFC, CSA, CFP
Investment Advisor Representative
Lincoln Financial Advisors