A large portion of the recent growth in long term care insurance sales that the industry is seeing has come from group plans. Thats a positive change from past years.
But one thing isnt changing: Group LTC carriers continue to settle for participation results in the 5% to 8% range. Theyre very happy when participation approaches 10%!
It doesnt have to be that way. I recently talked with a firm that had managed an Internet enrollment that drew 23.5% participation on an employer-sponsored LTC plan for 1,500 employees. Several years ago, a large manufacturing company with which I had experience saw over 20% of its employees buy worksite LTC coverage.
Such results are very possible, and may not be that unusual, for other plans–if they adopt the strategies shown in the chart and discussed below.
Finding the best candidate plan sponsors. The trick is to sell group LTC plans to employers that are offering them for good reasons.
That means: Do not sell the plans to employers that see this as just the next voluntary benefit to add to the benefits mix.
Figuring out the difference is certainly difficult, since most employee benefits professionals focus on the employer-level sale, not on whether the employer is offering a plan grounded in a truly trusting relationship with the employees.
But shifting the focus is worth the effort, for good participation results come from marketing to employees who trust their plan sponsor to do whats best for them. (Note: The employee population should, of course, have an adequate earnings level and higher-than-usual average age.)
Indeed, assessing an employers objectives in offering LTC, and how the coverage fits with the employers overall benefits philosophy, is key to getting out of the 5%-8% participation range for group plans. Conversely, saying “no” to employers that dont fit this description is key to not incurring expensive marketing costs for accounts that wont yield the desired results.
Gaining employer commitment. Even the most well-intentioned plan sponsor may not have the wherewithal to conduct an effective LTC insurance marketing plan to employees.
Buying LTC insurance requires some long-range financial planning on the part of consumers. The group marketing campaign must recognize that by planning to introduce the coverage in a series of steps–employer endorsement, educational materials, employee meetings, etc.
Admittedly, executing these steps takes time and effort on the part of the employers human resources staff. But, unless everyone is realistic about that commitment at the start, the necessary enrollment steps wont happen when they should–and participation will be lower than desired.
Putting together a sound marketing plan. If the plan sponsor is committed to offering LTC insurance for all the right reasons, then its worth investing in a comprehensive marketing plan.
In fact, the LTC market and products require extensive communications. Here are some tips for a successful marketing campaign:
- Use a needs-based approach. Inform employees about the likelihood that theyll need LTC, how much such care will cost, and who will pay for it.
- Provide layers of information. Organize information into simple, logical groupings, and allow people to get into details based on their personal need to do so.
- Give opportunities for personal conversations. Hold group meetings that feel like one-on-ones to everyone in the audience, and have the enrollers stay around to answer peoples personal questions.
- Simplify information, but dont overlook anything. Remember, employees are informed consumers and are probably seeking information from individual agents as well, if theyre considering your group product.
Group LTC insurance plans may be priced for low participation, but I have a hard time believing anyone likes to invest in a relatively elaborate marketing plan only to get 5% of employees to buy the product.
LTC participation rates will rise if producers sell group plans to the best sponsors. As for the other sponsors, wait for them to become more sophisticated about this product–and they will, as this market continues to grow.
Alan F. Barthelman is president of AB & Associates, a worksite marketing consulting firm based in Cape Elizabeth, Maine. His e-mail:
Reproduced from National Underwriter Life & Health/Financial Services Edition, January 21, 2002. Copyright 2002 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.