Letter to the Editor, National Underwriter
David Miller, CLTC
I have had it with doom and gloom articles saying that LTC sales are down primarily because of HIPAA and TQ policies. Personally, I am having my best year ever thanks to HIPAA. My average annual premium is up ($2000) per person and this year I will personally write over $200,000 in premium while my agency does close to $3 million. I don't get it. My theory is that if sales are flat it is because agents who in the past dabbled at LTC (pre HIPAA) quit dabbling all together after HIPAA because their ignorance of the product increased and only those agents that specialized in LTC saw sales increased. Since there are fewer agents that just sell LTC, this would account for the so-called "flat sales". Experienced agents all know the huge boost that HIPAA has given us. While it is true that the tax incentives alone aren't enough to make people purchase LTC, it certainly handles one of the main objections we face daily and that is that the government will pay for care. Wake up, folks! The government is out of the long- term care business unless you are poor and qualify for Medicaid. And who knows how long it will be in that business?
I am also fed up with the indecision of recommending TQ or NonTQ. How long will it take before agents realize this is a no-brainer.? As soon as HIPAA was passed, I began selling nothing but TQ policies. When you understand the big picture, it is obvious. The handwriting is already on the wall. Are you aware that the IRS is now sending letters with 1099's to claimants asking them to explain their benefits from a NonTQ policy? (TQ benefits are tax free up to $190 per day.) The claimant can't just expense-out their LTC expenses either and consider it as a wash because the IRS only allows deductions for unreimbursed services and the claimant is clearly being reimbursed. Also, the LTC market is still in the infancy stage and the carriers need to be careful when it comes to paying out claims too quickly.
Think about it - what is this insurance called? LONG-term care, right? Not short-term care insurance - so what is the big deal over the 90 day certification requirement in a TQ contract? Could it be that the industry and the government has no other choice but to look to long-term care insurance as our nation's safety net for this coming crisis? And could it be that in order to make sure the product will still be around 20+ years from now (when the real claims come in) that it was necessary to implement protective guidelines? We need to make certain we are doing what's best for our clients when it comes to advising them on all aspects of long-term care insurance. I guarantee that one of the biggest questions your client will have is - "will the company be there when I need them?" If your company has been notorious for paying out too quickly (some carriers I know pay benefits with a 1 ADL trigger and one pays at the policyholder's discretion - NonTQ of course), has had to make up for it with several rate increases, and does a poor job of underwriting, what will your answer be?
David Miller, CLTC, is an insurance agent specializing in long-term care insurance. David is also a National Trainer for LTC Consultants. He conducts Phyllis Shelton's 1 1/2 day seminar to insurance companies and agencies around the country. David is a musician, husband and father of two. He hails from Dalton, OH with his wife Tammy, son Spencer and daughter Hallie. David can be reached at dmmltc@bright.net.
©1999 Shelton Marketing Systems, Inc.
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