Also, the greater is the indemnity, the greater is the exclusion
period. Britt points to one product that pays an amount equal to
triple the client’s investment, but only seven years after purchase.
Producers also need to take care to do a competent fact-find-
ing to ensure they meet product suitability requirements; and to
guard against negative underwriting outcomes.
“what I tell producers is to do the field underwriting first,”
says Irving. “Because when a life or LTC carrier declines an appli-
cation for medical reasons, that rejection gets coded into the cli-
ent’s MIB [Medical Information Bureau] record. And this could
adversely affect the client’s ability to qualify for another product.”
Burkle, too, cautions that producers need to factor in the
prospect’s age and financial condition when deciding whether
to recommending optional riders. A prospect over age 60 will do
better without a 5% compound inflation rider because he notes,
one can generally purchase twice as much death benefit (which
doesn’t inflate) and LTC benefits without the rider as with the
rider.
Producers also have to properly set expectations in respect to
underwriting: Because of required health assessments for many
of the products, processing can (depending on the carrier) take
up to several weeks. says Herr: “we’ve endeavored to streamline
underwriting as much as possible. But the advisor can’t simply
submit a ticket for a linked benefit product. Medical issues have
to be addressed.”
Not least, producers to be prepared for objections to product
recommendations. Prospects might question why, for example,
a combo product is not as customizable as a traditional LTC of-
fering. Britt observes that, whereas a conventional LTC policy’s
elimination period (the duration of time following an LTC event
that must pass before a claim can be entered) might range from
0 to 360 days, almost all linked-benefit products carry a 90-day
elimination period. similarly, the products generally don’t allow
prospects to choose between simple and compound interest
when choosing an inflation rider.
The carriers keep the product options simple so as to mini-
mize administration costs,” says Britt. “Though there is less
customization, linked benefit buyers can take comfort knowing
the products will distribute a benefit. That might come as an LTC
benefit guaranteeing double or triple the initial amount invested,
a death benefit or a return of premium.”
That’s a key selling point. But Britt observes that agents often
fail to close by marketing a one-size-fits-all solution to clients
whose financial means and objectives vary widely; and by inap-
propriately framing a conversation about long-term care. exam-
ple: discussing how an LTC benefit can pay for care in a nursing
home (a topic prospects generally don’t like to discuss) rather
than how the benefit can help keep them in their home (which
they’re more receptive to).
Those advisors who manage to win over client prospects, adds
Britt, can expect long-term relationships. “Of all insurance solu-
tions, long-term care is the toughest one to pitch,” she says. “But,
ironically, once the sale is closed, the product is the last one to go.
It’s the hardest sell, but enjoys the highest retention rate.” NU
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