Long Term Care Certification Practice Test 2026 – Complete Exam Prep

A significant increase in a top producer's long-term care insurance first-year lapse ratio suggests that more policyholders are deciding to discontinue their policies within the first year of purchase. This scenario often indicates that the policies sold may not align well with the needs or financial situations of those clients, hence reflecting unsuitable sales practices.

When clients do not fully understand the product they are buying or if the policy is not tailored to fit their needs, they may realize soon after purchase that it is not the right choice for them. Such a situation can lead to a higher lapse ratio as dissatisfied customers may opt to cancel their coverage early, especially if they perceive the policy's costs or limitations as burdensome.

Therefore, the increase in the lapse ratio serves as an important signal that the sales process may not have adequately addressed the clients' needs or circumstances, highlighting a potential area of concern regarding the effectiveness of the sales approach used by the producer.