How To Cut LTC Declinations On Older Applicants
By
How does the declining age of long term care insurance applicants affect underwriting?
In the past, insurance agents who sold LTC were said to be in the retiree market (age 65+). Their professional lives were filled with daytime seminars and mid-day appointments in their prospects living rooms.
But today, many LTC agents are instead concentrating on the pre-retiree market (ages 50-65).
Underwriting data suggests this shift is a very smart move. The declination rate for applications is directly related to applicant age. (See chart for declination rates at one company that performs the underwriting function for more than a dozen insurers.)
A number of factors can account for declinations. In some cases, the agent does not understand the underwriting guidelines of the company, and submits obviously declinable risks. However, in reflecting on the chart, Ive concluded that agents who work with 70- to 80-year-olds are not less knowledgeable about underwriting guidelines than agents working with 50- to 60-year-olds! There must be something else going on.
My best information reveals a number of reasons for the correlation of age and declination rate. Studying them–and responding to them–is likely to help agents increase their approval rates when working with older applicants. Here are the key factors:
The insurer requires face-to-face assessments. This is a leading cause of declinations, because: the applicant does have a cognitive problem; the applicant was nervous and became flustered during the exam; or the applicant simply wasnt paying attention.
Response: Successful agents ask if the applicants doctors records will mention any memory problems, or if they have ever discussed Alzheimers Disease with the doctor. Also, some agents go through a mock face-to-face assessment to prepare the applicant.
Agents do not find out the applicants real medical situation until the end of the sale. At that point, since theyve already spent several hours with the client, some agents may go ahead and submit the application, even if the medical information just discovered suggests the person may be uninsurable for LTC.
