Long Term Care and Disability Insurance

How to Choose a Long Term Care Carrier

Presented by Michelle Daharsh When it comes to selecting an LTCi carrier today, you certainly have lots of choices. Most carriers offer a basic foundation of benefits that look fairly similar from company to company, so how do you make a choice and recommendation to your prospect? Here are three characteristics to consider when making that choice: 1. Contemporary, Innovative Products Look at carriers that offer competitive features that set them apart from the competition. Features like cash benefits, streamlined underwriting, calendar day elimination period, and waiver of elimination period for home care claims are just a few of the many and important options available. 2. Competitive Pricing Do your research and find the products that are competitively priced. Age, health and whether the prospect has a spouse or partner all become critical information in your selection for a recommendation to your prospect. Providing your prospect with the best products for the best value is critically important. Each carrier has their own “sweet spot”. Some examples of “sweet spots” can be competitive pricing at certain ages, partner allowances, multiple inflation options, and underwriting risk. 3. Financial Strength and Stability In the past it wasn’t much of a factor what the ratings of a carrier were. We have fewer carriers now in the market and the rate instability has shown that carrier strength is very important. Working and placing your prospects’ business with a financially strong carrier becomes even more important. Carriers with a history of remaining competitive, stable and secure even in tough economic times will most likely prove that they are able to meet the needs of your prospect in the future. Also, look for carriers that maintain high ratings from industry rating organizations. So whether it is the competitive pricing of a product or the financial strength of a carrier, Financial Brokerage is equipped to provide you with the resources and knowledge you need in making the best decision with your prospect and their long term care insurance coverage.
Long Term Care and Disability Insurance

With Experience Comes Knowledge.  Are the LTCi Carriers Getting…

Presented by Leonard Berthelsen We certainly would like to think that knowledge comes from experience and that we are onto a brighter future with long term care insurance.  A recent article on the website LifeHealthPro.com outlines many of the issues affecting LTCi carriers and the impact that it has on policy design and pricing.  The article outlines a recent study that was completed using Society of Actuaries (SOA) data from 2000 through 2011. In that data, of 172,000 claimants of long term care benefits representing $7 billion in claims revealed some important information such as, “that although actual claims for LTCi policies with lifetime benefits may be higher than those for policies with limited benefits, the claims incidence for policies with limited benefit periods is actually higher than the incidence for policies with lifetime benefits.” This shows that the concern for lifetime benefits from the carriers’ perspective may have been too conservative and might open the door to future benefits being available in longer durations.  Another excerpt from the LifeHealthPro article that dealt with substandard issued LTCi policies was, that despite the fact that “the substandard risk category paid more for coverage than policyholders in the standard or premium category, they are less likely to file claims than policyholders in the standard category.”  The conclusion drawn here from the claims data compiled by the SOA is that the carriers pricing again may have been too conservative in relationship to their overall risk for this class of applicants.  Are the carriers using this new found “tool” (claims data)?  In my opinion it appears that at least some of them are.  New generation of LTCi products seem to be designed based on some of the data on claims and benefit utilization, and that is a good thing.  As the carriers better understand the data put into their pricing model, new versions of LTCi will be introduced and the future certainly looks brighter today than 5 years ago.  LTCi products related to linked benefits, life insurance and annuities all have had provisions and riders recently developed to address the long term care event that many of its policyholders will likely face.  As is the case with most industries that have government regulations and oversight, we have to have the regulators onboard with change as well.  Having them recognize the need for improvement in plan design, pricing and overall features will be a big step for an industry wanting to succeed, but also needing to be profitable.  Regulators in recent years have had to wrangle with the issue of carrier rate increases on previously sold LTCi plans.  This is not an easy task for them or for the carriers.  No one likes rate increases and it is certainly never easy explaining this to the policyholder.  Maybe some of this data will help the carriers get it right.  Will we see a resurgence of interest from carriers to enter the LTCi market place that left in previous years, or new carriers that see an opportunity for new growth?  Time will tell, but one thing is for certain, the more knowledge and experience that a carrier and an industry has, the better the products and better the pricing.  It’s funny how the very reason why we sold LTCi is what is giving us the glimmer of hope for a brighter future – CLAIMS!