Long Term Care Insurance Agents True Motive Part 1

In this series on Long Term Care Insurance Exposed I am talking about some of the things that could be, and many times are, hidden in the process or after the sale of Long Term Care Insurance. My hope is that I am able to "reveal the secrets" if you will about hidden agendas and things to watch out for. Similar to a 20/20 tv series special report.

We first had to decide what are the items that might be hidden. Next we are progressing to discuss each one individually. Our list started with hidden clauses in contracts that allow the insurer not to pay a later claim. Then progressed to this topic of what is the "agents true motive." We have several other topics that will follow in later blogs.

Starting today; what is the Agents TRUE Motive? That’s what we all want to know right? When someone sells us a product. If a waitress is extra nice to us, or if a car salesman has to run back to the "finance manager" one more time in negotiating the deal. How about our stock broker, or our mortgage lender, and even our bank teller now that tries to get us to fill out a credit card application. How and Why are these people doing this?? What is their true motive? In Long Term Care Insurance, let me tell you the answers.

First, and we know the answer right. Brokers and Agents are trying to make a living. BUT REMEMBER and this is the most important part of this blog. There’s an honest living and a dishonest living. Right..? Yes! When we think of the waitress keeping our water glass full or asking if everything is OK with our food – we think of her earning an "honest living." But when we think of the car salesman going back and forth making us wait endlessly, we think of a "dishonest living." That isn’t entirely true as across the board for those industries. There are definitely dishonest waitresses, and definitely honest people in car sales. The same is true of Long Term Care Insurance Agents.

Simple math tells us that the higher the price, whether at the restaurant, the car dealership, the stock ticket, or the insurance premium; the higher the volume the higher the commissions. That doesn’t mean that you shouldn’t have higher volume, or that the salesperson shouldn’t make more money. What it does mean is that there can be temptation there for them to drive the numbers up. Again, we’ve all heard the waitress ask us if we want dessert. That doesn’t mean we shouldn’t always get it, or that she is evil and dishonest for asking. (Although some of us on diets might think she is.) Long Term Care Insurance is similar in the fact that there are over 15 different optional policy provisions that can be placed on a policy, each affecting the premiums.

It doesn’t directly mean that your broker is dishonest if he adds all 15 riders to your policy and tells you why you need every last one of them. It DOES mean that he will make more money though. It could mean that he understands your needs as you’ve explained them and is presenting you with the options that you want and need.

I just recently ran into a person in the state of Michigan, where their financial planner brought in a Long Term Care Insurance broker to "help" solve the long term care planning need. This broker added so many bells and whistles to this policy, it totaled over $14,000 in annual premium. When I ran the quote after determining the actual need of the person. The premium was $2400. It would be very difficult to even get that many bells and whistles on that particular policy to make it cost that much. This is a simple case of a Financial Planner who brought in his buddy and told him to "sock" it to his client because he knew that he could afford it. That is a case of dishonesty.

So recognize, agents and brokers do make commission dollars on the premiums that you pay. Just make sure that each benefit placed on the policy is what you want and need. Not just something that would be "nice" or make things easier. Place the options that you need on the policy and nothing else. When you buy long term care insurance you are trying to protect your assets not spend them all.

This is all we have time for in this first post. But in my next post I want to talk about the 2nd reason of "Agents True Motives."