One of the most heated debates within the LTCI specialist community is whether something is better than nothing.
Unfortunately, there are many examples of people who reduced some premium costs up front when they bought LTCI, and regretted it at claim time. Examples could range from benefits that don’t come close to paying the cost of care to benefit periods that are inadequate. A great example of the debate on this subject can be found at “Reader Feedback: ‘Budget’ LTCI Policies More Harm Than Good?”, where several producers debated the issues presented in the article “Designing an LTCI Policy for Every Client’s Budget.”
Something to keep in mind is that the initial policy sale must always be suitable for a client. Every state requires the personal worksheet financial suitability form to be completed, and if somebody would struggle to pay LTCI premiums for the life of the policy (including potential rate increases), then LTCI is probably not for them. In fact, an advisor may want to have a more stringent financial suitability than the state minimums — for example, limiting the premium to 5 percent of income, as opposed to 7 percent.
In the case of a client who doesn’t want to purchase LTCI or for whom a policy isn’t suitable, but who is still interested in other products or services, it may make sense to schedule a follow-up meeting about long term care planning for a future date.
And for those who do buy, after the policy is delivered, it would be an excellent idea to schedule an annual policy review.