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Life Health > Life Insurance > Permanent Life Insurance

5 steps to deal with LTCI declines

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Q. With insurance companies tightening up underwriting, I’m concerned that my declines will increase. What suggestions can you provide to help turn a decline into an in-force policy?

A. As we all have learned the hard way, a declined client is a very unhappy client. So it helps to have a procedure in place if this occurs. 

For advice in this area, I consulted with Leni Cohen, who manages the Decline Review Program for ACSIA.

Here are her suggestions:

Step one: When initially meeting with the client, keep your options open when discussing the need – particularly if you realize that there could be an underwriting problem.

A good statement to use is: “Every carrier has different criteria. Based on the information you have provided. I recommend this carrier as our first choice. However, if we run into an underwriting problem and you are not approved, I have another carrier in mind.  So we have a backup plan.”

Step two: Provide additional information that indicates a positive focus by preparing an agent letter to submit with the application.

Include an explanation of borderline conditions. The client will feel that you are already working for him. If the outcome is a decline, it may soften the blow. And underwriters like the additional information.

Make sure that the client knows that whether he goes forward or not with the policy, it is important to remove a decline from his permanent records for future insurance products.

Since the client knows that you have other options if one person is refused, that helps prevent the situation where the other spouse refuses to take a policy if the partner is declined.

Step three: Contact the clients before they receive a decline letter. Explain that the underwriter at the carrier saw some issues in the medical records, you are on top of it and are working to get it resolved.

Step four: Although you cannot speak directly to the clients’ doctor, you can direct the client to ask the questions that you need answered.

Consider asking the clients to sign a release form for you, the agent, at the time of application. So, if there is a decline, you have open access to the information from the carrier. 

Be aware that each carrier handles this process differently.

Step five: Consider appealing the decision.

Filing an appeal can be a long process but frequently with positive results. Ask questions so that you understand the process the underwriter uses to make a decision. Underwriters will return your calls and are open to listening and looking at appeals. Be polite. An angry point of view will not get the results you want to achieve.

The result for an overturned decline is financial success. And, hopefully, more client referrals as a reward for showing that you care.


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