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How to Avoid a Declined LTC Case

Bob Maruska
LTC & DI Specialist

The traditional LTC market is slowing down and the number of carriers is getting lower. The Asset-Based market is growing with the same major carriers and no major changes on the horizon. Life insurance combo plans are growing very quickly. The major difference between these is whether the product has a true LTC rider (IRS-7702 B) or a Chronic Illness rider (IRS 101G) .

I don't want to get into the products this month - I want to talk about how you can better qualify a client for the right long term care plan. The first two major items are the Monetary Budget for LTC and the Health Status of the client. Let’s talk about the budget first. A large majority of our quotes start out as an Asset Based product with a Single premium or a 5 or 10 pay option. The agent quickly learns that the budget cannot handle this type of product and sale. We now know that we are into a life/combo sale with a lower continuous pay premium or a traditional plan that is subject to a rate increase in later years and no death benefit included in the plan.

That brings me to the health status of the insured. The application process is very long for a traditional plan. The application can be between 40 to 60 pages long. This LTC application will make a life application look easily. Recently, we have been seeing more declines for LTC coverage because we are not doing any field underwriting. We need to remember that a LTC plan or rider is underwritten differently than a life insurance plan only. The LTC portion of the plan is a health policy or rider. Similar to a disability plan or a regular health insurance plan.

We have recently developed a fillable FHC PRE form for LTC. Click here for the form. 

Here are the 5 major reasons for a decline for a LTC application: 

  1. Diabetes ( Condition is not well controlled)
  2. Build
  3. Memory Loss
  4. Depression
  5. TIAs – Mini Strokes
Please take some time and review the attached form to be familiar with some of the information needed to discuss your LTC case. The two most common questions that arise when we are discussing a case come from these secnarios: The client is an adult onset diabetic and we do not have his A1C reading and we did not get any information concerning the medication and dosage for the insured. OR the height and weight of the insured are unknown. This form also states that if you receive any type of disability payments, the client is probably a decline for LTC coverage. At your convenience, please review and become familiar with this form. It will save you some valuable time and allow you to give a more accurate offer to your client.

Remember, you can always reach out to me to discuss your case.



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