For Parts 1 and 2 of this article, see “How to Get Your Long Term Care Insurance Client Approved: The Basics” and “How to Get Your Long Term Care Insurance Client Approved: The Meeting and the Close”
Your clients have decided that they’d prefer to use long term care insurance to help pay for care, protect their assets, and, hopefully, relieve their families of some of the enormous responsibility that can come with care giving for elders.
Before you begin completing an application, however, it’s helpful to lay out the steps that will be required to review your clients for coverage. You’d be surprised how many people haven’t ever been subjected to a health history review for an insurance application – or at least not for a very long time.
In addition, LTCI applicants are reviewed differently than life insurance or even disability income insurance, so the more familiar your clients are with the process, the better it will be for all involved parties. Your client’s history of diseases, illnesses, and injuries might have a minor effect on a life insurance application, but could have greater effect on an LTCI offer.
Over time, as you work with more LTCI clients and see how their applications are handled, you’ll have a better sense of the differences and how to help prepare your clients.
Outline the application process
The insurance company requires all clients to file an application that includes important information about them, their medical history, and other biographical data. The carrier then takes time to complete its review, so make sure you inform your clients of any specific steps after the application is submitted.
It’s important to underscore the confidentiality policy of your firm and the insurance company. If an insurance medical and cognitive exam may be required, let clients know they’ll be contacted to arrange the exam. Prepare them for how it will be conducted, including where and when it can be done; let them know that, generally, it won’t cost them anything.
If your clients need to put a check or money down via a credit or debit transaction, explain exactly how the company handles these deposits. If it’s a check deposit, they’ll often cash the check to bind the conditional coverage even before they approve the applications. Some companies that allow credit or debit payments may not charge the cards initially, but often will do so to bind the policy once it’s approved. However the insurer handles these deposits, you should clearly inform your client about what will take place and when, so there aren’t any surprises. Your clients may be very unhappy if the company cashes a check for several thousand dollars, and they weren’t prepared for it.
The health exam
Many LTCI companies don’t routinely require in-person insurance exams, but will start off with a phone interview. These phone calls can take anywhere from 20 to 45 minutes – longer if they entail a lot of medical history. The exams may also be lengthy if the insurer elects or needs to test cognitive skills by phone via an approved screening process. Since clients are often asked to repeat some of the same information they wrote down on the applications, it can be helpful for them to have a copy of the application so that they’re familiar with dates, times, medications, etc. and don’t have to go looking for it during the call.
Couples are usually contacted separately to set up a phone interview; coach your clients to book the interview for a time when there will be fewer interruptions or distractions. This will help if cognitive tests are needed during the call. It may be helpful to give your clients an idea of what types of questions they could be asked so they are as mentally prepared as they can be. If the time of the initial phone call becomes inconvenient, the client should reschedule it for a date and time that works better for them. It’s more important for the client to be as relaxed as possible during the phone call then it is to rush to get it done.
The review process may also involve retrieving medical records from the client’s health care providers. These records aren’t required in all cases, but may be necessary for some medical histories. Your client should be aware they are signing a Release of Medical Records or HIPAA release, as well as what exactly that means. You might also tell the client that the HIPAA authorization allows the insurer to investigate a database that reveals prescription drug history – and that sometimes, this will remind the client about a medication they forgot to mention.
The importance of accuracy
For the written part of an application, you’ll want to prep your clients about the importance of accuracy. You’ll find it can be helpful for the clients to complete the application themselves so that everything recorded is in their own handwriting; this can help protect you if something important is left out, causing a problem at claim time.
In the medical history section, clients should find the names, addresses, and phone numbers of the medical practitioners they’ve seen, even if they have to look them up. They may not always recall the address or some other detail; an Internet search can be helpful in these circumstances to uncover this information.
It’s also important to have detailed prescription medication information handy for this part of the application. Suggest that your clients gather together their medication bottles or packages to obtain dosage information and correct spelling of the medications.
As you finish up the application, be sure to leave clients (with the required documents such as the Shopper’s Guide to LTC Insurance, or the Medicare Guide when required by age), and a copy of the outline of coverage.
You may find that sending clients a letter or email containing an overview of the basic steps and timeframes will help them prepare. Remember: You presented them with a lot of information the day you completed the application, and they may not remember everything. Once the application is submitted, keep your clients informed as the company reviews their information and reaches a decision.
The biggest challenge may be if the insurance company’s offer is less ideal than you’d anticipated – hence the importance of accurate pre-underwriting. However you deliver the news, remember to focus on the policy’s benefits and what it can provide. Unlike disability income insurance, LTCI offers are not made with exclusion riders. Generally, offers can include a premium surcharge, a lengthening of the elimination period, a reduction of the benefit period, and, in some cases, the removal of a built-in inflation rider or another benefit rider – or some combination of some or all of the above.
Finally, if you’re unable to offer coverage at all because of some medical history or application finding, be prepared to offer alternatives. This might include referring them to an elder care attorney, a qualified financial planner, or government solutions. In exchange for the extra assistance, you may be rewarded with referrals from satisfied clients.
Stuart H. Armstrong is a John Hancock Life Insurance Company agent with Centinel Financial Group. He can be reached at 617-424-0005 or [email protected].