Long Term Care Insurance Agents – Important Newsflash
For long term care insurance agents or brokers selling LTCI many are making crucial mistakes, causing policy holders to drop their policies. An educated LTC agent or broker will rightfully replace coverage not suited in the client’s best interest. By education, a better term is current awareness of costs, needs, tax effects, policy choice, and even illegal agent activities. These topics, plus selling tips are highlighted here.
1. NEEDS Here too often a scare tactic is imposed by LTC agents to sell that dwells solely on the dire consequences of not owning a long term care insurance policy. However, the policy sold is often the one best suited for their prospect. Too often, the prospect is never asked, “Tell me which of these two options is more critical to you.” “The first is sacrificing forever money and accumulations to pay for nursing or assisted care.” “The second is becoming a burden on children or relatives important?”
Current facts show that the average age of a family caregiver is a 46-year-old woman, devoting 20 hours or more of care giving assistance. Tip: This means smart agents often give a joint presentation to both the senior(s) and the possible caregiver(s). Multiple sales, and policy renewals are the reward.
2. COSTS This is where an inexperienced agent can rapidly sink. The agent or broker first feels that the policy must cover current cost. Then they almost keel over when seeing what the total costs would be. As an out, many sell a lower benefit policy, and tell each client, “Purchasing this policy is going to cover almost all your costs.” LTC clients must be educated on current costs. Be honest with your prospective client. Give them the facts, and see how much of their problem can be solved.
If they currently cannot afford the premiums, they might have others assets to help close the gap. I would venture my reputation that many policies sold today only cover half the costs. Tip: That means the long term care insurance agents sell a $100 daily benefit, with a 90 to 100 day deductible. FACTS: The 2009 skilled nursing home care cost is estimated at about $194 per day for a semiprivate room. Fortunately, this is only a $5 a day increase since 2007. Assisted living facility care now has a base rate of slightly over $3,000 monthly. Lastly, it now costs nearly $22.00 per hour for home health care from a qualified aide.
3. POLICY CHOICE Current there are over 50 reputable insurance companies offering a variety of LTCI for either long term care, and/or assisted living needs. Many of the higher quality policies are issued by non-branded (household name) companies. A LTCI – Long Term Care Insurance Agent in Minneapolis represents one insurance company, and sells only the policies they offer. A LTCI BROKER independently can have a wide variety of LTCI policies to sell by two or more insurers. In fact, my research places this number at an average of 4 insurance carriers for these policies. There are so many policy variances among deductibles, age brackets, pre-existing conditions, and costs.
There is not a single one policy fits all solution available! Do your clients a favor.Tip: If you are going to consider yourself an LTCI expert, have enough of an arsenal at your disposal.
4. TAX BENEFITS The Federal Government, in what few people could actually consider a stupid move, has provided increased 2009 tax deductions for purchasing long term care insurance. It your responsibility as an LTCI broker or agent to provide these details to your clients. In fact, it might be an exact door opening opportunity for reviewing coverage of clients sold 2 years ago. The amount of deductible limitations for 2009 is based on age grouping. A say 43-year-old client may be eligible for up to $600 of income tax deductibility. For some age 71 or higher it could be as much as $3,980.
For more complete details, search for Section 213(d) (10) on the internet. The IRS does not give an automatic deduction, as they are unaware of LTC premiums. Image the terrible service you or a former agent are providing many buyers if you do give the premium payer this timely information.
5. ILLEGAL AGENT ACTIVITIES Surprisingly, the number of agents and brokers selling long term care feel the only illegal activities that can be performed are collecting premiums and not turning them in. WRONG. The CMS rulebook contains 176 pages and attempts to explain what you cannot do and can do when offering your product to seniors. It not only covers the insurance policy, and payments, but your presentation and even the way you prospect for leads.
Here are three common, yet serious violations. A repeated one, I have seen personally on numerous occasions, is a seminar for seniors where a free meal at a local restaurant is included. This next one has a high volume of agent and broker violators. Here a direct mail piece is sent out to say 1,000 seniors in an area. Agents then make phone calls to those that did not respond. The third violation is one that countless long term care producers have never been told. It is simple to explain, do not make unsolicited calls to seniors.
For agents and brokers selling either Medicare supplements or LTCI take the time to do this internet search. Check out H.R. 6331, the “Medicare Improvements for Patients and Providers Act of 2008.” Much of it affects sales practices from 2009 and forward.
If you are going to devote time to this lucrative, helpful, and rewarding insurance path, take the time to stay up to date with this constantly changing market. Coaches and advisors provide current information without promoting companies or leads to sell you. Reading articles like this and many others is one of the easiest ways to safely stay ahead.