Just like that average person, the average insurance broker may have a vast knowledge of health insurance, vision insurance, dental insurance and life and disability — but when it comes to the complexities of LTCI, they also need education.
Brokers seek out experts to help understand and explain the technicalities of long-term care insurance.
THE VALUE OF THE SPECIALTY
Long-term care insurance incorporates different components than other types of insurance. These plans include many nuances and they work differently than other types of benefits that are offered in an employees’ benefit package. For example, LTCI rates are based on the age at which you apply for coverage and are designed to be stable. In contrast, health insurance rates are based on usage and will likely change each plan year.
Studies demonstrate that 99 percent of people who purchase an LTCI policy hold onto it for life. This shows us that this type of benefit is something that people take time to decide on, really dive deep into the details of, and genuinely want to make the best determination for themselves now and for their future. Therefore, it is essential that people have the tools and the trained professionals to clarify the facts for them.
So why would a law firm want to bring in a LTCI specialist to interpret the details? Most lawyers are fact finders and would want to be equipped with all the data necessary to make an informed decision. An expert in the field of LTCI is a broker who only sells LTCI and who knows the available LTCI plans inside and out.
If a lawyer or legal management professional specializes in a certain field, they tend to become skilled in that field. They have an adept knowledge of the technicalities of that discipline. The same is true with LTCI in the insurance industry. A brokerage firm that focuses solely on long-term care insurance would be considered an expert in that area.
Brokers seek out experts to help understand and explain the technicalities of long-term care insurance.
If you are part of a law firm that only has one insurance broker to educate your employees on all your benefits, you may be missing out on some much-needed expertise. Many brokers would be the first to admit they have a lack of knowledge when it comes to LTCI. They would also be the first to agree to bringing on an authority on the subject.
An LTCI-specialized broker can help you avoid potential liability — something that law firms are likely more hypersensitive to than most businesses. Bill reconciliations can catch numerous billing mistakes through audits when a new client has an existing LTCI plan. An example of this was a client who had 3,400 participants and had to make 540 corrections. They had 98 unreported terminations, 150 eligible employees who should have been added to the plan, 29 date-of-birth corrections, 163 division corrections and 39 name corrections. These mistakes can, and will, open your firm up to unrealized liability.
There really is no better value to adding an expert, but many are concerned about what bringing on an LTCI authority might cost you monetarily. The majority of insurance products generate a commission that pays for the servicing of that plan. LTCI is no different, so bringing in a specialist to assist your LTCI plan doesn’t cost your firm anything.
If you are a law firm that would like to have an LTCI specialist talking to your employees about their options, you need to have your current insurance broker partner with an expert in the LTCI field. This partnership will relieve that broker of having to play the part of the all-knowing. The task of implementing, servicing and auditing your LTCI plan will move to the LTCI broker.
Do you have questions about LTCI? You can be sure that others do, too. Let me know what your questions are, and we will try to address them in a future column.
