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LTC Can and Should Be Better Sold

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Long-term care insurance can and should be sold in much larger numbers than the current rate, said Phyllis Shelton, president of LTC Consultants, Nashville. She spoke here last week at LIMRA International’s annual meeting.

“Other product” jealousy is partly to blame for anemic sales, she said. Many agents assume that selling a long-term care policy means losing a life insurance sale.

“That’s not true,” Shelton said. In fact, she calls LTC coverage “a door-opener.”

Also contributing to low sales figures is lack of comprehensive agent training. Failure to sell inflation coverage is a sure sign that an agent has received inadequate training, Shelton said. Without inflation protection, a policyholder will receive coverage at the rate services and products were selling when the policy was purchased. In just a few years, lack of inflation protection can significantly decrease the value of the policy, she said. A person purchasing LTCI from her never leaves without inflation coverage, Shelton said.

Another sign of poor training is when an agent sells coverage for room and board and not the other charges involved in a nursing home stay that can be up to 20% of the total charge, Shelton said. The consumer should know what the out-of-pocket expenses will be for a nursing home stay, Shelton said.

The “quagmire” of compliance rules is another deterrent to selling LTCI, Shelton said. An organization using one of Shelton’s brochures for selling LTCI continues to use the 1998 version, even though it has been updated every year since. Shelton said the organization would like to update along with her, but can’t because it takes too long to get approval from the local compliance department.

Not teaching agents how to network with long-term care insurance providers and other professionals is also a mistake organizations make that result in sales that are far less than what they could be, Shelton said.

The way LTCI is marketed can also have a negative impact on sales, according to Shelton. Marketing is usually directed to people ages 50 and older. She said a person with a remote control in his hand who comes across a commercial of an elderly person with a walker going into a nursing home will not hesitate long before changing the channel.

“People won’t buy LTCI if they think it will put them in a nursing home, they need to know it can help keep them out of the nursing home. Present it as ice cream not spinach.”

Indeed, Shelton said that age is not a factor in whether a consumer will need long-term care.

“If you’re 18 years old you’re not too old for long-term care insurance,” she said. “Most people who need it are from 18 to 64.”

People marketing this product should make the point that nursing home care makes up only about 20% of what LTCI typically covers, Shelton said. LTCI can afford consumers stays at assisted living facilities or home health care service.

Shelton emphasized that agents should do more to sell LTCI not only for themselves, but also for the benefit of the United States economy. She reasons that the impact of the aging population relying on government entitlement programs for their long-term care needs might prove a devastating blow.

“Do you all understand how big a deal this is,” she said. “Soon there will be more Depends on supermarket shelves than Pampers. If the baby boomers fall on Medicaid, it’s going to dwarf the losses from September 11,” she said referring to the terrorist attacks on New York’s World Trade Center and the Pentagon in Washington, D.C.

To boost sales, organizations should treat LTCI as a core product for trips and bonuses, “to show agents it’s important,” Shelton said. The biggest secret to educating agents selling LTCI is “instilling in the heart of each agent that this is a much bigger deal than just selling another insurance product. The dignity of every American family is involved right here.”

Shelton ended her session by challenging audience members to illustrate for their sales force the importance of LTCI by buying a policy.

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 5, 2001. Copyright 2001 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.

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