5 Tips for Choosing a Long-Term Care Insurance Agent

by | Jan 14, 2020

The National Law Review published a column that states unequivocally that, “An advisor experienced in long-term care is an important part of any advisory team.”  (You can find a link to the article here.)

So how do you choose that “experienced” long-term care insurance agent advisor?  Read on for what to look for before buying long-term care insurance insurance or adding a long-term care insurance specialist to your advisory team – this is critical if you are a “fiduciary advisor”.

(NOTE that in order to sell a long-term care insurance insurance policy of any type the “advisor” must be a licensed and appointed insurance agent even if he doesn’t call himself an “agent”, therefore I purposefully use the term “agent” in the following article.)

1.  What is the agent’s actual “experience”?
Just being licensed and appointed with a company to sell LTC insurance does not equal experience. Selling a couple of policies a year is not experience.  What specific training has been done?  (Look for the CLTC – Certified in Long-Term Care designation.)  How many years has he sold LTC insurance? How many policies per year?  How many clients have been on claim?  Which companies and types of policies does he represent?

The LTC Experience Formula:
(((Years x Volume) + (Multiple Companies x All Product Solutions)) (Factored by an ability to uniquely design a plan for each client + help them understand & take action)) = Experience!

2.  Does the agent represent or “broker” multiple companies?
In today’s marketplace, this is critical.  Ask for a detailed list of the companies the agent sells, and then ask for an explanation of the pros and cons for each – if the agent can’t do this quickly and confidently, he or she doesn’t truly represent multiple companies.  Being “able” to represent other companies does not mean the agent actually does or has any meaningful experience with other companies.

​If presented with only one policy or company option, ask if the agent is “captive”.  A true “captive” agent can only represent one company.  He or she cannot legally “broker” other companies’ policies.  This also applies to sales presentations made by an insurance company representative or “wholesaler”.

Is the agent a “career” agent?  If the agent’s business card shows a specific insurance company name, the agent is either a captive or career agent.  “Career” agents can broker or “sell-away” from their own company’s products, but they often don’t.

You may also ask if other independent, non-company agents are allowed to sell/broker their company’s policy.  If not, that’s a clear signal the agent may be captive or career.

Always seek a second-opinion, competing quote(s), when considering the purchase of LTC insurance from a captive or career agent or if you are only shown one product/policy option. This is especially true if the agent is pushing you to replace your LTC insurance; click here to read our replacement report.

If an agent answers, “Yes, I’m a broker”, insist on apples-to-apples quotes from the other/multiple companies he or she can sell.  An agent who claims to be able to sell/broker other companies but only presents one company is NOT acting in a client’s best interest.

3.  Is the agent “Partnership” certified?
While you may not want or need a Partnership-qualifying policy, the required LTC Partnership agent training (eight-hours, plus four-hours every two years) speaks volumes about an agent’s commitment to providing a full range of LTC insurance solutions.

​”Traditional” LTC insurance is the only type that can be Partnership-qualified, and to legally represent any traditional-type policy an agent must be Partnership certified.

An agent who is not Partnership certified can only sell a limited scope of “chronic illness” life insurance riders that are not primarily designed for LTC planning.  A “chronic illness” rider simply accelerates the death benefit – or more often only a limited portion of the death benefit – if the rider’s eligibility conditions are met.  While there are appropriate uses for these types of riders, if it’s the only type an agent can legally sell, he or she is not able to act in a client’s best interest.

An agent who cannot or does not sell traditional LTC insurance will always present a strong bias against traditional coverage and a bias for a linked-benefit solution, even if that is not in your best interest.

(Click here for more information on long-term care insurance partnership)

If you are only shown, only offered, one type of LTC insurance – either traditional OR linked-benefit – seek a second opinion from someone who represents both and who will educate you on both types.

4.  Does the agent sell “linked-benefit” LTC insurance?
Like question #3 above, an agent who only represents traditional LTC insurance – or who dismisses linked-benefit options out of hand – is not be able to put your best interests first.

If the agent answers, “Yes”, ask for a linked-benefit quote that is tailored to and appropriate for your needs.  Also ask what linked-benefit company(ies) he or she is actively appointed with.  More than one is preferable – there are many different types of linked-benefit policies.  Can the agent show you multiple companies and options?  Reimbursement AND cash-indemnity?  Single-pay AND pay-as-you-go?

Linked-benefit LTC policies are not designed/priced the same as traditional LTC insurance – can the agent can effectively explain the pros and cons of each?

5.  Will the agent commit to a “free” (sales-free) initial consultation?
Buying LTC insurance is a big decision.  It is critical coverage for a secure retirement.  The coverage can be complicated and expensive.  And LTC insurance should be tailored to your specific plans and budget.

A good agent trusts his or her expertise and will trust you to honor the time and effort invested in an initial, sales-free, educational meeting without undue pressure to complete an application at the very first meeting.
BONUS TIP:  Will the agent fully disclose commissions, other compensation & potential conflicts of interest?

This is a critical factor in today’s fiduciary-focused planning environment.  Are there any potential conflicts of interest?  Are they disclosed?  Commissions (up-front & deferred “renewals”), bonuses, incentive travel, and employee benefit/career contract qualification are all factors that could improperly influence an agent’s advice.

Note that being paid on a commission-only basis is not in and of itself a conflict of interest.  A lower-commission policy may not represent the best coverage, nor does a higher-commission policy mean it’s an inappropriate recommendation.  The process of disclosure and discussion of agent compensation and potential conflicts of interest along with the other five tips presented here can go a long way in identifying a truly independent LTC specialist.

An agent who will not simply, clearly, completely disclose commissions and any potential conflicts of interest may not be acting in your best interest.

Updated 1/9/2020
This article was originally published by Bill Comfort, CSA®, CLTC®, LTCCP on his website and re-posted with permission. ComfortLTC.com.

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