A Whole New LTC World Awaits Agents
The current situation is great, but the future is even brighter for the growing number of property-casualty agents cross-selling life-health products.
What makes it so is the fact that more agents are taking the time to complete the study necessary to enter the huge and waiting market of long-term care insurance. When they do begin to sell LTC products, they are excited to find a waiting and receptive audience.
As p-c agents gain experience, they realize that they are not only helping their clients and prospects avoid the distinct possibility of emotional and economic trauma, but that they are also earning a handsome flow of commission and renewal income.
Prospects for LTC insurance are all around, including current clients and the prospect file. What most of these individuals have in common is their clear-cut need for the coverage. The problem is clients dont know they need it because there arent enough LTC agents to spread the word to them.
If clients have thought about it at all, they dont think theyll ever require long-term care. Theyre in denial. They believe that if the need for long-term care should strike, due to an illness or accident, it would always happen to someone else, never to themselves.
Yet it may happen, quickly and without warning. In fact, its happening right now to many unfortunate people throughout the country. When a severe disability strikes, there are some tough financial times ahead, not only for that individual, but for family members and friends as well if the stricken person does not have adequate LTC insurance. In such cases, a family member is often forced to leave his or her career to become a caregiver. No one wants that; not the person in need, family members, or friends. But, because of the enormous cost and needs of long-term care, it happens every day.
The average annual cost of a stay in a nursing home has now reached roughly $60,000–and its double that in many metropolitan areas. Home health care can be even more expensive. Few people can afford such costs for very long, if at all. Your clients, and prospects, need to know that.
They should also know that, contrary to the misconceptions of many of them, their standard medical plans do not cover long-term care.
While Medicaid does cover some long-term care expense, its a welfare program for those with few, if any, assets. That eliminates clients and prospects with assets from qualifying for the coverage. This opens a whole new marketing avenue for agents who are savvy enough to see that selling LTC insurance leads to a constantly improving bottom line.
There is yet something else most of your clients and prospects should know, but very few do know. The government, through the passage of the Health Insurance Portability and Accountability Act of 1996, has provided tax breaks to those who purchase qualified individual or employer-sponsored LTC plans. This fact alone has spurred many individuals to purchase the coverage.
Also not known to many people and, unfortunately, to many agents, is that LTC insurance not only covers the very real needs of seniors, it also protects baby boomers, and even those much younger.
According to our research, 40 percent of the functionally disabled in this country are between the ages of 18 and 64, requiring long-term care. Younger clients would benefit from purchasing LTC insurance as early as possible because premiums can triple between ages 50 and 70.
All these facts, and many more, should be of great interest to agents and their clients and prospects.
There are many ways to convey these points. (See accompanying chart.)
Before an agent can begin to take advantage of the marketing methodologies to deliver the message about LTC products, its paramount that he or she learn as much as possible about the product, the marketplace, and the needs of the people to be served. That may seem like a large assignment, but the good news is that there are many sources available.
Over 100 carriers offer LTC insurance. In addition, information is available from such organizations as the Health Insurance Association of America, Association of Health Insurance Agents, both headquartered in Washington, D.C., and the National Association of Health Insurance Underwriters, based in Arlington, Va.
Also, countless articles continue to appear in both the trade and consumer press about long-term care and LTC insurance, and many insurance-financial services publications advertise LTC books, videos and seminars. There are also industry marketing organizations that specialize in LTC insurance and offer training courses, both on-site and online.
Finding the time to learn about the product and having the staff to support it can be two important considerations agents face before beginning to sell LTC insurance.
One thing an agent can do is consider adding an LTC insurance specialist to the staff. Or work out a commission-shared arrangement with a nearby agency or financial services organization with expertise in marketing and selling this product line.
Also, agents can consider establishing solid relationships with nearby CPAs and financial services consultants, all of whom have clients with a need for LTC insurance. This can be either on an independent basis or through a co-op marketing venture.
When shopping for LTC carriers, agents should concentrate on those who have at least an “A” (for excellent) rating from such organizations as Standard & Poors, A.M. Best Company, Moodys, and Duff & Phelps. Agents should seek a company that has been in the LTC market for more than a while, has a proven track record, and shows all signs of being around well into the future when the producers LTC clients could be making their first claim.
What clients want in an insurance and financial services provider is one-stop shopping–an agency that can take care of all the clients needs and eliminate the necessity to look around.
And what agents should want–indeed, must provide–is an agency that not only satisfies those requirements in top-notch fashion, but keeps their clients and prospects constantly updated on valuable new additions to their product line.
Long-term care insurance must be sold. It is not a product that is bought. As agents begin to contact their clients and prospects, there will be objections from some that agents may not have faced before. Remember the facts we have cited. They are important selling points.
As the agent begins to inform his or her prospects about these important facts, the prospects or clients objections should begin to melt away, especially when, early in the presentation, an agent points out that they are not covered for the high costs of long-term care and could be facing some extremely difficult times ahead.
Many people over the age of 65 will spend some time in a nursing home. In addition, prospects and clients should know that innovative benefits and features continue to be added to todays LTC insurance plans. These benefits not only cover nursing home care, but care at home, in adult living facilities, and at adult day care centers.
Simply put, your agencys clients and prospects are not going to find another insurance product that provides, as LTC insurance does, the help they need to preserve their financial independence, avoid being dependent on others or a burden to family or friends, or that will enable them to preserve their freedom to make choices, including the possibility of their never having to leave their home.
Clients and prospects should know that they are not going to find another product that, within one plan, would also protect their savings, assets and standard of living; conserve their estate and assure an income, especially for the at-home or surviving spouse; guarantee affordable quality care; and avoid having to go on public assistance or Medicaid.
Americans are, on the average, living much longer. As they do, the odds are they will require long-term care some time in the future. The help of all agents, brokers and financial planners is vital to getting the message out that all Americans are very much at risk and need to do something about that risk before it is too late.
In order to do that, we encourage you to study the LTC market, give it due diligence, then go into the field–before your competitors do. Its a whole new and exciting world where you, the agent, will provide a much-needed product to so many. And, in the process, you will experience a brighter and more profitable future than you may have ever envisioned achievable.
John Wane is president of American Independent Marketing, Yakima, Wash., and can be reached at email@example.com. Lenny Anderson is president of GoldenCare USA Inc. He can be reached at firstname.lastname@example.org.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 26, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.