Brokerage Agents Ought To Offer LTC, Says Former NAILBA Chairman
Who is selling long term care insurance?
Before, in the brokerage distribution system, “it was always the other guy selling it,” said Arthur Jetter, in a seminar here at the annual meeting of the National Association of Independent Life Brokerage Agencies.
“They sold it as Medicare supplement insurance, or as an add-on senior product,” said the former NAILBA chairman and owner of Jetter & Company, Omaha, Neb.
And today? “Its us–or it ought to be us,” said Jetter. He devoted much of his podium time to offering suggestions on ways to help spur that along.
“We in the brokerage business have got to get inside the nine dots on this product,” he declared.
Many life brokerage professionals do want to sell LTC insurance, and some are already expanding into the market, he conceded.
However, other brokerages are asking, “How to do it? Where to do it?” Still others continue to view the coverage as a type of “health insurance,” or as “a product thats too expensive and somewhat complicated,” he said.
The environment is changing, however. LTC products have advanced and also become more competitive, Jetter pointed out.
In addition, people are seeing the need for the coverage as part of their financial planning. Its drawing the attention of baby boomers, he said.
Also, the Health Insurance Portability and Accountability Act of 1996 has called public attention to the fact that people “need to do something” about funding their long term care, Jetter said.
But for LTC insurance to move in the brokerage market, he said brokerage general agents need to develop more confidence in working with the product and in positioning it.
In his own practice, he recalled, this began to happen when he realized that “if I dont talk to people about it, I dont sell it.”
That, he quipped, “is an amazing piece of advice.”
BGAs also need to understand the markets, offer training to build producer confidence, and learn more about the products.
“Recognize that this is just like selling life insurance. Just keep it on that simple basis, and youll do a lot better,” he advised.
There are multiple markets for the product, he reminded the BGAs. These range from corporate business owners, the self-employed, key business people, employees, seniors, and more.
As for sales ideas, he suggested that parents buying LTC for their adult children might be one possibility to consider. “Internal Revenue Code Sec. 2503(e) provides for an unlimited gift tax exclusion for medical expenses,” he noted.
When discussing critical LTC policy features, he advised keeping the inflation protection and lifetime facility benefit in the product, even if other features must be reduced or omitted.
People need that for their last years, according to Jetter.
“If a client cant afford everything, you can lower the price by using a longer elimination period and then maybe a smaller daily benefit,” he suggested.
To assure a steady premium flow, “you could use (the payout from) a single premium immediate annuity to pay the premiums of the LTC policy.”
Furthermore, “if your client cant pass the LTC underwriting, you could offer an underwritten single premium immediate annuity instead.”
Jetter urged BGAs to remind clients that “there is a high cost to waiting to buy an LTC policy.” The client may end up becoming uninsurable and then have to find other means of funding care, he explained.
Reproduced from National Underwriter Life & Health/Financial Services Edition, December 24, 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.