Q. Do conditional premium receipts and coverage during the application period differ by carrier? For example, is the client covered from the date of application or from the date that the application is approved by the carrier?
A. Four different carriers – four different types of coverage!
I recently wrote a couple in their early 50s. Both qualified for a best health rating. When I went to deliver the policy, I called them for several weeks and could not locate them. Finally, the wife called to tell me that, while the policy has going through the underwriting process, her husband had been rushed to the hospital with Guillain–Barré disease. He was now going to need nursing home care.
I breathed a sigh of relief when I realized that his hospital stay began after the underwriters had received the medical records. But I began to wonder what the situation would be depending on the carrier where I submit the policy.
See also: Closing in on better LTCI close rates.
For us agents when we are taking an application, by the time we get to the page with the conditional premium receipt, most of us don’t take the time to explain these provision. By that time, all of the parties involved are ready for the meeting to end.
And when a carrier issues a new policy, how many of us review the back of the booklet to see if these provisions have changed? I don’t. (But I definitely will now.) So when I decided to write a column on this topic, I was really surprised how the coverage differed between the various companies.
The information below is based on individual policies for coverage beginning when the application is submitted (rather than requesting a later effective date). Also, I have tried to (somewhat) summarize the official language.
For payment received, this receipt is given and accepted with the express understanding that the insurance applied for will go into effect on the date of the accurately completed application if the applicant is found to be insurable in accordance with the Company’s underwriting standards as of the date of the application, the policy is issued and the initial premium has been received by the Company.
See also: 5 steps to deal with LTCI declines.
Start Date – When Temporary Insurance Begins
The temporary insurance provided by this Agreement will begin at 12:00 a.m., where the Applicant(s) live(s), on the latest of these dates:
- The date the above sum is received; or
- The date the application is signed by the Producer(s) and Applicant(s); or
- The date this Agreement is signed by the Producer(s) and Applicant(s).
Benefit – Temporary Insurance Benefit