Q. I know that as part of the client appointment, I need to explain about the possibility of long-term care insurance (LTCi) rate increases — why they have occurred in the past and the future probability. How do you handle that conversation so that the prospect understands the reasons and still feels comfortable buying a policy?
A. First, see last's month's column. There, I focused on the reasons for the rate increases, with information provided by actuary Jim Glickman. This column gives the version of the information I use when explaining this topic to clients.
See also: LTC Almanc, part 1 and LTC Almanac, part 2.
The topic of rate increase must be mentioned, particularly because LTCi applications include a list of rate increases that have occurred for that company. So, I'd rather have the conversation during the initial presentation instead of having it when focusing on completing the application and solidifying the sale.
The result: I have never lost a sale because of the rate increase issue. And, by dealing with it during the client presentation, it becomes a non-issue and does not interfere with closing the sale.
My client presentation is structured so that I broach the topic of rate increase after I have had an in-depth conversation about the various benefits that determine the policy premium amount and before I switch topics to explain selecting a carrier and the application process.
