As financial services professionals, life insurance producers have the enormous obligation to help protect their clients, and their clients’ families, against the financial risks they face. However, many Americans today may be under-prepared to deal with the financial risk associated with the need for long-term care.
With an aging population, the need for individuals to protect against the financial risks posed by an event requiring long-term care is growing. It is estimated that nearly 9 million Americans ages 65 and older will need long-term care this year, according to the U.S. Department of Health and Human Services. According to “A Guide to Long-Term Care Insurance,” published in 2004 by America’s Health Insurance Plans, that figure is expected to increase to 12 million by 2020. These statistics emphasize that now is an ideal time for life insurance producers to begin counseling their clients on the importance of adding long-term care insurance (LTCI) to their retirement planning strategy.
Fortunately, in an effort to make the product easier for producers and consumers to understand, carriers have been working to simplify the long-term care solutions offered and the LTCI sales process. However, simplification isn’t enough to make the transition from life sales to LTCI sales. Insurance is an emotional purchase — and emotions tend to run high when discussing long-term care insurance. You can introduce the topic of LTCI as a natural extension of the conversations you are already having with clients about life insurance. LTCI lends itself to the same familiar discussion. Selling life insurance has evolved. The emphasis should no longer be on the lump sum received but on the product’s ability to sustain the family’s lifestyle. The reason behind clients’ decisions to purchase life insurance — the need to protect their family’s lifestyle — can be similar to clients’ reasoning behind the purchase of LTCI.
Many people, when envisioning the future, may not consider LTCI because they don’t picture themselves needing it. However, LTCI can make it easier for people to obtain the care they need in the comfort of their own home. For producers looking to augment their clients’ overall protection strategy with LTCI, making a connection with your clients by recognizing how your clients’ feel about long-term care can be invaluable in making the sale.
Make connections
Long-term care insurance, like life insurance, can be a sensitive subject and one that many families may wish to delay discussing. However, it is important to encourage that conversation now. What are their concerns regarding the future? Do they fear becoming a burden to their children? Are they concerned about protecting retirement income from being depleted by the costs of long-term care? Does your client want to make sure his or her spouse is protected despite your client needing long-term care? Are your clients looking for assistance with planning for retirement?
A client’s hopes are just as important as a client’s fears in determining long-term care needs. Understanding how your clients hope to spend their retirement income, where they hope to live, and the extent to which they expect family members to be involved in their personal finances, are also important factors to consider when determining a client’s LTCI needs. Regardless of the motivation for buying long-term care insurance, clients can better connect to you — and the product — when you understand what’s most important to them.
Producers often use clinical language packed with statistics to discuss financial products or tools. However, when selling LTCI, these numbers may have little impact. Individuals’ self-preservation instincts lead them to believe that they will not be one of the statistics. They do not think they will need long-term care. Instead of only relying on numbers, use stories. “Do you know anyone who is caring for a parent, relative or friend? What impact is it having on his or her life?” Use these experiences to illustrate for your clients how others are coping with these challenges. These stories bring home the issue and can put a face on it.
Additionally, carriers are making it easier for clients to engage in the LTCI purchasing process, strengthening the connections you’ve already made. Some are creating tools that allow clients to go beyond the general numbers — e.g. income, age and assets — and tap into their individual needs. Other tools allow producers and their clients to discuss an individual’s preferences for long-term care, and factor those preferences into long-term care insurance decisions. These tools are an excellent way for producers to become more familiar with client needs. Familiarizing yourself with the types of issues and concerns that clients are facing will help ease the transition to selling LTCI.
Carriers are also creating new products that are easier to understand and more affordable. In the past, the two major barriers to LTCI sales were the expense and complexity of the products. These new products make it easier for clients to start protecting themselves. It is better for your clients to have some protection against the costs of long-term care rather than nothing.
Expand your sales horizon
Most producers focus on one particular area of insurance sales, such as life, annuities or long-term care. And while it is important to be an expert on a specific topic, approaching the sales process with “tunnel vision” can hurt you in the long run. To increase sales and connect with prospects, identify ways in which your specific expertise lends itself to another product. Affinities may exist specifically between annuity producers and those producers looking to sell LTCI because the goals and ages of clients may be similar. This may also be true of life insurance producers and those looking to sell LTCI.
It is also important to expand your thinking about clients that may need long-term care insurance. Typically, consumers tend to put off the purchase of long-term care insurance until they are much older. By waiting, individuals run the risk of developing health problems that can affect their ability to qualify for coverage.
In addition, LTCI rates tend to increase with age, making the product more expensive the longer and individual waits. The new designs of some long-term care insurance products allow clients to buy LTCI at a younger age — when they are likely to be healthier — at a lower premium and build on that coverage over time as they need more protection. This new structure makes long-term care insurance a more accessible product for younger adults facing competing financial demands.
Make the connection and then make the sale
A key to selling LTCI — like life insurance — is making a connection with your clients by recognizing your clients’ feelings regarding long-term care. A discussion about LTCI is an easy fit when also discussing life insurance needs since it is all about helping to make the future more secure despite a need for long-term care or a death. The two products help build a stronger financial safety net for clients while helping producers build their business.
Ease the transition to LTCI
While life insurance producers will face some challenges when transitioning to LTCI sales, there are several resources available that can help boost confidence when meeting with clients and talking about LTCI:
• Think about your own situation: Are you and your siblings caring for an aging parent? Do you know someone who is? Look in your mind and heart — how do you feel about that? Looking at your feelings about the topic rather than just thinking about it allows you to better connect with your clients.
• Get trained: Continuing Education (CE) courses and the CLTC (Certified in Long-Term Care) course can help get you educated on the product’s features and keep you informed on emerging trends in the industry. Additionally, states have different requirements for allowing producers to sell LTCI, so check out your state insurance department’s Web site for additional information.
• Find a mentor: Find a mentor to help you get familiar with the industry — he or she can provide you with valuable insight into best practices, common misconceptions and overcoming sales challenges.
• Partner with an LTCI expert: Seek out a partner who you can refer clients to, and vice-versa.
• Use available tools: Many resources now exist to help jump start the conversation about long-term care insurance. Some insurers provide online estimates of long-term care costs for individuals, and others offer tools for producers that allow them to model the available insurance choices based on the clients’ personal preferences.
• Know your audience and costs: Be sure to familiarize yourself with the costs of the long-term care facilities in the communities you serve. The MetLife Mature Market Institute (www.maturemarketinstitute.com) tracks nursing home, assisted living, adult day care and homecare costs by region and state.
• Sometimes, just say no: LTCI is not appropriate for everyone or every situation. Take a hard look at each and every client you come across to assess whether or not LTCI is a good solution. If it’s not, don’t be afraid to say no.
• Take advantage of state partnership programs: State partnership long-term care insurance programs can be used to your advantage. The availability of programs like the New York State Partnership for Long-Term Care Insurance has made strides in helping residents understand the need for LTCI. Free resources may be available on state partnership long-term care insurance program Web sites that can help you speak more confidently to the product and its benefits. Visit www.longtermcare.gov for more information.
Joseph “Joe” W. Jordan, Senior Vice President, National Sales and Marketing, MetLife, oversees the development of sales programs and client-centric tools that support the sales force and strengthen client relationships. Mr. Jordan is the company’s voice at many industry events and is well-known for his motivational speeches and his advocacy programs that inspire both new and experienced financial services representatives.