Long Term Care Certification 2025 – 400 Free Practice Questions to Pass the Exam

In the context of long-term care insurance, increased first-year lapse rates can be a significant indicator of poor sales practices. When many policies are lapsing shortly after the first year, it suggests that policyholders are not seeing the value in their insurance or may have been misinformed about the benefits and coverage during the sales process. This could reflect aggressive or misleading sales tactics, where sales representatives prioritize closing deals over ensuring that customers fully understand the product and its relevance to their needs.

High application approval rates indicate that underwriters are accepting most applications, which may not necessarily signal poor practices but rather efficient underwriting. Low policy termination rates would typically suggest satisfaction among policyholders — a positive sign for the insurance company. Customer loyalty programs, while potentially beneficial for retaining clients, do not directly correlate with sales practices but rather focus on maintaining relationships with existing clients. Therefore, the option that clearly highlights a flaw in the sales process is the increased first-year lapse rates, pointing to a disconnect between client expectations and the reality of the policy they purchased.