Back to Basics

The legislation’s goal is to encourage more people to buy LTCI, and the new program expands partnership LTCI to more states (previously it was available only in California, Connecticut, Indiana and New York, but as of year-end 2008, 20 states had enacted the program). Consumers who buy the program’s special LTC policies are allowed to protect more of their assets and qualify for Medicaid when the LTCI benefits expire. Private companies selling long term care insurance policies must be approved by the state and the policies must meet minimum standards with features like inflation protection.

Partnership LTCI has the potential to increase the coverage’s appeal to a wider audience, but you’ll need to review your state’s licensing requirements before you can sell the policies, Morith cautions. The DRA requires that agents undergo an initial eight hours of LTCI training and four additional continuing education hours every 24 months in order to sell the policies.

The training regulations vary by state, so you’ll need to check with your local regulators. “Some of the states are saying this is only for those who are going to sell partnership policies,” says Morith. “And some of the states are saying this is for anyone who’s going to sell any long-term care insurance, partnership or not. The requirements and the educational requirements that will fulfill a particular state’s rules and regs may vary.”

Read the fine print
LTCI training programs will help you understand the concepts and mechanics of how the insurance works. That’s a good start, but you need to see how the insurance operates in individual policies, and the best source for that level of detail is the LTCI contract itself.

Admittedly, it’s difficult to stay awake when wading through any insurance policy, but the contract is the product that you’re selling so it’s very much worth the effort. Of course, you could argue that insureds don’t read contracts if they trust you. That might be true, but the last thing you want is for a sale to fall through because you can’t explain a contract feature or benefit to a prospect or applicant who drilled down into the details and wants answers to very specific questions.

“You have to read the contract,” says Morith. “Don’t rely solely on the marketing literature or the agent’s handbook. Read them, certainly, but actually read the contract language and understand it. If there’s something you don’t understand, you go back to the company and ask them. They have marketing help lines. They have people there who can help you.”

Staying focused
It would be easy to spend a lot of time analyzing LTCI contracts to evaluate the offerings and master the technical detail. But putting that much effort into that level of preparation could significantly reduce the time you have available to get in front of prospects. Slome suggests that one way to avoid analysis-paralysis is to narrow the number of policies you consider to four or five where you are satisfied with the features, rates, and the insurer’s underwriting guidelines and financial stability.

In terms of technical knowledge, Slome uses an analogy. “Most people try to become engineers and build the airplane but the airplane never gets off the ground,” he says. “They never put in the effort to say okay, now let’s really fly it. There’s no question you need a level of expertise, but maybe it would be more prudent to partner up with a specialist who can help guide you in those initial few sales until you get grounded. You don’t need to or want to make this overly complex.”