Tips from The LTCpro®
5 Tips for
Choosing a
LTC Insurance Specialist
NEW UPDATE - CAUTION:
Do NOT buy a life insurance policy with a "Chronic Illness" rider to fund your long-term care/extended care needs. Most of these riders are sub-standard and not well-designed to cover LTC needs. Many agents pushing these riders are NOT fully-certified to sell real LTC insurance and so they push these inadequate riders as a substitute. If a "Chronic Illness" rider is all you are shown, find another agent!
Any advisor, agent or specialist who does not, will not consider for your benefit any and ALL policy options cannot represent your best interests
and is NOT operating as a "fiduciary".
(NOTE that in order to sell a LTC insurance policy of any type, an "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 LTC specialist'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.
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.
- Which companies and types of policies does the LTC specialist represent?
- Does the LTC specialist represent and recommend ALL types of coverage including both "traditional" and the "hybrid" types of policies?
- How many years has he sold LTC insurance?
- How many policies per year?
- How many clients have been on claim?
- What specific training has been done? (Ask if "Partnership Certified" and look for the CLTC - Certified in Long Term Care® designation.)
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 (AND plan types)?
Not every agent who can sell LTC insurance is a true independent LTC insurance specialist.
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 cannot do this quickly and confidently, he or she does not 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.
Many "financial advisors" or "money managers" who are "stock brokers" or "registered representatives" for investment securities purposes have a limited number of companies or types of LTC policies they are allowed to sell by their employer. If this is the case, DO NOT buy LTC insurance from them - they cannot represent your best interests!
Captive Agents
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." Never buy based on getting pitched only one policy from a captive agent or insurance company rep.
Career Agents
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 do not. If an agent says he can sell multiple companies, insist on seeing illustrations from multiple companies!
You may also ask if other independent, non-company agents are allowed to sell/broker their company's policy. If not, that is 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.
Not every agent who can sell LTC insurance is a true independent LTC insurance specialist.
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 cannot do this quickly and confidently, he or she does not 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.
Many "financial advisors" or "money managers" who are "stock brokers" or "registered representatives" for investment securities purposes have a limited number of companies or types of LTC policies they are allowed to sell by their employer. If this is the case, DO NOT buy LTC insurance from them - they cannot represent your best interests!
Captive Agents
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." Never buy based on getting pitched only one policy from a captive agent or insurance company rep.
Career Agents
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 do not. If an agent says he can sell multiple companies, insist on seeing illustrations from multiple companies!
You may also ask if other independent, non-company agents are allowed to sell/broker their company's policy. If not, that is 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" or "I can sell other companies", insist on seeing 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?
A LTC specialist will always hold a current Partnership continuing education certification.
While you may not want or need a Partnership-qualifying policy, the required LTC Partnership & Qualified LTC Insurance agent training (eight-hours, plus a four-hour renewal 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. Ask to see a copy of their Partnership Certification dated within the last two years.
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 is the only type an agent can legally sell, he or she is NOT able to act in your best interest.
An agent who cannot or does not sell traditional LTC insurance will always present a strong negative bias against traditional coverage and an improper bias for a "hybrid" or "linked-benefit" solution, even if that is not in your best interest.
(Click here for more information on Partnership LTC insurance)
A LTC specialist will always hold a current Partnership continuing education certification.
While you may not want or need a Partnership-qualifying policy, the required LTC Partnership & Qualified LTC Insurance agent training (eight-hours, plus a four-hour renewal 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. Ask to see a copy of their Partnership Certification dated within the last two years.
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 is the only type an agent can legally sell, he or she is NOT able to act in your best interest.
An agent who cannot or does not sell traditional LTC insurance will always present a strong negative bias against traditional coverage and an improper bias for a "hybrid" or "linked-benefit" solution, even if that is not in your best interest.
(Click here for more information on Partnership LTC insurance)
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?
A LTC insurance specialist will sell Linked Benefit, Combo, AND Traditional LTC insurance policies.
Like question #3 above, an agent who only represents traditional LTC insurance - or who dismisses "hybrid" or "linked-benefit" options out of hand - is not be able to put your best interests first.
If the agent answers, "Yes", ask for a hybrid/linked-benefit quote that is tailored to and appropriate for your needs. Also ask what hybrid/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, 10-pay, AND lifetime pay-as-you-go? If not, do not buy LTC insurance from that agent!
A LTC insurance specialist will sell Linked Benefit, Combo, AND Traditional LTC insurance policies.
Like question #3 above, an agent who only represents traditional LTC insurance - or who dismisses "hybrid" or "linked-benefit" options out of hand - is not be able to put your best interests first.
If the agent answers, "Yes", ask for a hybrid/linked-benefit quote that is tailored to and appropriate for your needs. Also ask what hybrid/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, 10-pay, AND lifetime pay-as-you-go? If not, do not buy LTC insurance from that agent!
Linked-benefit LTC policies are not designed/priced the same as traditional LTC insurance - will the agent give you a quote for each? Can the agent effectively explain the pros and cons of each? If not, find a different agent!
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 LTC specialist 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.
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 LTC specialist 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.
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 potential conflicts of interest 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 is 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.
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 potential conflicts of interest 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 is 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 is not willing to simply, clearly, completely disclose commissions and any potential conflicts of interest may not be acting in your best interest.
Updated 4/12/2024
Bill Comfort
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