I love long-term care insurance (LTCi).
It’s been my passion for more than 25 years and has earned me a wonderful living.
However, like any other FMO, I have to face facts. And the facts are sales in our industry are down 23 percent in 2013.
I believe this is due to a combination of factors — higher rates, negative press, the increasing popularity of hybrid products, and the growing number of declines.
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In my experience, the number of declines is higher than ever. Whether clients are lying about their health, or carriers have tightened up on their underwriting standards -– or both -– who knows? As a brokerage, it is our challenge to find coverage for those clients who can’t qualify for or afford a traditional policy.
At my company, we began actively searching out and promoting “alternative LTCi” products about three years ago. It was a slow start. Not only did this require a major shift in the way we do business, but it also required a new mindset.
My entire career was based on selling traditional LTCi – monthly benefits, years of coverage, cost of living riders, joint discounts. And, most important, carriers rated “A” or better. So the first mind I had to change was my own.
At first, I had a hard time defending the other types of products. After all, in my heart I felt “one year? What good is one year of coverage? No cost of living rider? What good is a policy with no inflation? A “B” rated carrier? No thanks.”
But then a funny thing happened. I attended a conference where an actuary with one of the biggest LTCi carriers stood up and said “49 percent of our claims are for less than one year.” 49 percent! Given the size of this carrier, this is not a small number. So I started thinking that maybe having one year of coverage was not such an awful idea. Plus we were losing so much business to declines that his seemed like a good way to help those clients and save our bottom line. Everybody wins.
Next I had to bring new products to our producers. The obvious producer is one who sells LTCi, so you would think that would be a natural fit.