Many long-term care brokers or agents selling LTCI are making critical mistakes that could lead policy holders to abandon their policies. A knowledgeable LTC broker or agent will replace coverage that is not in the client’s best interests. Education is a better term than ignorance about costs, benefits, tax effects, policy choices, and illegal activities. These topics are also highlighted, along with selling tips.
1. LTC agents often use scare tactics to sell policies that focus on the terrible consequences of not having long-term care insurance. The policy that is sold is often the best for the prospect. The prospect is often not asked to choose between the two options. The first involves sacrificing your wealth and accumulations in order to pay for assisted or nursing care. The second is putting too much pressure on family members or children.
According to current facts, a 46-year old woman is the typical family caregiver. She spends 20 hours a day providing care. Tip: Smart agents will often present a joint presentation to the senior(s), and possible caregiver(s) at the same time. Multiple sales and policy renewals are the rewards.
2. COSTS An inexperienced agent could quickly sink here. First, the broker or agent feels that the policy must be sufficient to cover current costs. They almost fall over when they see the total cost. Many will sell lower-cost policies and then tell clients that this policy will cover most of your expenses. LTC clients should be informed about current costs. Your prospective client should be honest. Tell them all the facts and you will be able to solve their problem.
They might be able to borrow money from their family to pay the premiums. My reputation would suggest that only half of the policies sold today cover all costs. Tip: Long-term care insurance agents offer a $100 daily benefit with a 90 to 100-day deductible. FACTS The cost of skilled nursing home care in 2009 is approximately $194 per day for semiprivate rooms. This is only $5 per day more than in 2007. The base rate for assisted living facility care is now slightly more than $3,000 per month. It now costs approximately $22.00 an hour to receive home health care from a qualified assistant.
3. POLICY CHOICE Currently, there are more than 50 reputable insurance companies that offer a range of LTCI to meet long-term care and/or assisted living requirements. Non-branded (household names) companies are often able to issue higher quality policies. A LTCI – long-term care insurance AGENT is one insurance company that sells the policies it offers. Independently, a LTCI broker can have many LTCI policies that they can sell to multiple insurers. My research shows that this average number is 4 insurance companies for these policies. There are many policy variations in terms of deductibles and cost, as well as age brackets and pre-existing conditions.
There’s no one policy that works for everyone. Have a lot of tools at your disposal if you want to be a LTCI expert.
4. TAX BENEFITS In what few people would consider a stupid move the Federal Government has increased 2009 tax deductions to purchase long-term care insurance. As an LTCI agent or broker, it is your responsibility to give these details to clients. It might even be a door-opening opportunity to review coverage sold 2 years ago. Age grouping determines the deductible limits for 2009. For example, a client aged 43 may be eligible to deduct $600 from their income tax. It could even be $3,980 for clients over age 71.
You can find more information by searching for Section 213(d), (10) online. Because they don’t know about LTC premiums, the IRS doesn’t allow an automatic deduction. Imagine the horrible service that you, or an ex-agent, are offering many buyers if the premium payer is given this information promptly.
5. ILLEGAL AGENT ACTIVITIES WRONG. It is wrong. The CMS rulebook has 176 pages. It explains what you can and cannot do to offer your product to seniors. This rulebook covers not only the insurance policy and the payments but also your presentation and the way that you prospect for leads.
These are three serious, but common violations. One of the most common, and one I have personally seen many times, is a seminar that offers seniors a free meal at local restaurants. This seminar is a popular one with many broker and agent violators. This direct mail piece is sent to 1,000 senior citizens in a particular area. The agents then call those who did not reply. This third offense is something that many long-term care providers have never heard about. It’s easy to explain: seniors should not be called unannounced.
This internet search is for agents and brokers who sell Medicare supplements or LTCI. H.R. H.R. 6331 is the “Medicare Improving Patients and Providers Act 2008”. It has a significant impact on sales practices starting in 2009 and continuing forward.
You will be able to dedicate your time to this rewarding, useful, and rewarding career in insurance. Make sure you keep up-to-date with the constantly changing market. Advisors and coaches provide up-to-date information, without the pressure to sell or promote companies. This article and many others can help you stay safe ahead.