With the increased awareness of the growing need for it, long term care insurance has become a hot topic. Sales are up, and more states are implementing LTC insurance awareness campaigns while also adopting partnership programs, a collaborative effort between states and insurance companies created to reduce Medicaid spending.
Additionally, LTC costs are a major legislative topic and will be a significant issue in the upcoming presidential election.
As partnership programs expand, it has become important for producers to be aware of state-mandated training requirements for selling these LTC insurance policies. These requirements are above what is required for a basic life and health license.
The Deficit Reduction Act of 2005 made major changes to the Medicaid law by increasing the restrictions Congress put into effect years ago on gifts and transfers of assets to heirs. This has made it harder to for those needing long term care to qualify for Medicaid benefits.
At the same time, the DRA expanded the right of states to create partnership programs. These are designed to cut Medicaid costs by delaying or eliminating the need for some people to rely on Medicaid to pay for LTC services. That’s because purchasing a partnership plan allows policyholders to be eligible to receive Medicaid benefits if they should ever use up all their LTC insurance benefits.
Partnership plans have expanded beyond the original partnership states of California, Connecticut, Indiana and New York. As of August 2008, this expansion includes Arkansas, Colorado, Florida, Georgia, Idaho, Kansas, Minnesota, Missouri, Nebraska, New Jersey, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota and Virginia.
In addition, Nevada and Texas have approved partnership legislation, although their programs are not yet active, while Michigan, New Hampshire, Tennessee and Wisconsin also have partnership plans pending.
As a result, most states have adopted the training requirements for selling partnership policies and are demanding that all licensed producers take an initial 8-hour training course in selling the policies. This training must be approved by the National Association of Insurance Commissioners and must also be followed by a 4-hour refresher course every 2 years.
A few states have even adopted training requirements above those mandated by the NAIC. Because the requirements can vary by state, it is important for those selling LTC policies in more than one state to know the requirements, although some states do offer training reciprocity for partnerships.
Training class topics may vary but typically include LTC services, LTC insurance, partnership qualified (PQ) policies, and the relationship between PQ policies and other types of LTC coverage. To eliminate bias, these courses do not mention any carriers’ products or sales and marketing materials. But they do offer important help to accelerate LTC insurance sales skills.
There are a few matters to consider when choosing the right LTC insurance training for you. First, determine your state’s specific requirements. While this can be confusing, there are resources available to help you. For instance, some LTC insurance marketers and carriers include interactive maps on their websites that will provide your state’s specific training requirements. Or contact your state insurance department directly to ensure you have the most up-to-date information.
Next, if you sell in multiple states, you may want to consider a training resource that provides discounts for multistate partnership classes to help save time and money.
Finally, you’ll need to decide whether you prefer classroom or online training before you shop around. Several carriers offer discounts for online classes. Also, check with your broker or MGA to see if they will subsidize part of the course, as some will. Trade associations and industry advocates, such as America’s Health Insurance Plans, the Association of Health Insurance Advisors and the National Association of Health Underwriters, also offer online training courses and continuing education classes that can help you fulfill the requirements.
This training may seem tedious to the everyday LTC insurance specialist, but without completing it, you cannot sell LTC partnership policies.
Financial planners and CPAs who only write 1 to 3 pieces of LTC insurance business a year may view these additional requirements as time consuming and not worth the effort. Where selling LTC insurance is not your primary business, you may be able to partner with a full-time LTC insurance specialist and split the commission. Such specialists know the industry well and will have the required training.
However, I encourage everyone who plans to sell even one LTC policy to complete the education requirements. This is a great opportunity for those who have minimal LTC insurance sales experience but who want to be able to take care of sales opportunities for these policies when they arise.
With LTC costs skyrocketing and LTC insurance demand rising, it is important to be able to counsel clients effectively on the need for this insurance in their overall portfolio. So make some time in your schedule, do a little research and complete your state’s required courses. By being assertive and completing these requirements, you can better educate your clients on the benefits of LTC insurance and, when appropriate, a partnership plan. Being able to foster your LTC insurance business while effectively counseling your clients on planning for their future will make you a far more effective advisor.