Traditional long-term care insurance placement rates have suffered due to carriers offering more stringent underwriting guidelines – declines on one spouse or the other and policies issued at rate classes greater than applied for have caused a spike in policies not taken or accepted by one or both of the insureds. The consequence of this is lost profitability to the producer and general agent.
We spend untold hours running quotes on prospects without the faintest idea if they will qualify for coverage due to health reasons; additional time and resources processing the cases; and countless hours talking to underwriters on the phone trying to get them to change their minds in a no-wiggle room environment. Ultimately, the producer aggravates potential new customers or alienates existing clients.
The reality is that producers and general agents don’t make the rules
When companies across a market segment harden underwriting we have two choices; find another product to sell or adapt tactics. In light of the fact that many of us are committed to long-term care planning, how can we continue to help consumers in this difficult environment?
There’s a simple answer; get better at field underwriting the clients’ health profiles before beginning the quoting process. This not so revolutionary concept is easily accomplished by any producer or advisor.
A brief review of one or two insurance company underwriting guides will provide the basic questions one needs to ask prospects and clients.
We also have a one page health questionnaire that can be used to guide producers through the primary issues that impact long-term care insurance underwriting decisions.
The four primary items one must know are:
- Height and weight
- Tobacco use
- Recent major health issues or surgeries that may be pending
- Current prescription medications being taken (Very important as it is indicative of what may be ailing someone)
With this basic information we can zero-in on insurability and/or rate class
We can also recommend the insurance company that is most likely to look favorably on the prospect’s health issues. The producer appears professional because they’ve done some meaningful research for the client, and the chances of an unexpected underwriting decision are mitigated.
Doesn’t it make sense to ‘put the horse in front of the cart’ by getting basic vital health information from the prospect before a proposal is presented? Who wants unpleasant surprises after the fact? The process goes much smoother, everyone’s valuable time is not wasted and selling long-term care insurance becomes a profitable endeavor.
Contact your LTCI Sales Rep for assistance.