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Making Consumer-Oriented LTC Sales

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Beverly Hills, Calif.

The ultimate goal of a consumer-oriented sale of long term care insurance is to make sure “insureds get the benefits they expect when the insurable event occurs,” according to Jason Goetze.

For agents and companies aiming to get to this point, the process is a combination of “want to’s” and “have to’s,” asking and telling, and testing for balance, said Goetze, who is assistant director, Northwestern Mutual.

Speaking at the Second Annual Intercompany LTCI Conference sponsored by the Society of Actuaries, Goetze said, “There is no single right way for an agent to be in the business.”

He noted that there “is no legal obligation for an agent to offer LTCI” nor is offering it “part of any professional insurance agent organization’s code of ethics.” Agents offer LTCI “because they want to,” he said, adding that insurers “are in the same camp because they see an opportunity for profit or protection.”

During an interview with an LTC prospect, agents engage in a combination of asking for and telling information. Goetze explained that things such as using a fact finder and assessing client needs fell under the ‘asking’ column, while providing education and explaining options and choices came under the heading of ‘telling.’

But even in the explanation of options, Goetze said it was important for agents to ask needs-based questions before ‘telling.’

In the area of testing for balance, Goetze said that looking at the lapses and replacements in an agent’s book provides an indication of how consumer-oriented the agent’s sales are. For instance, he said that in looking at the quantity of an agent’s business, it was important “to look not only at sales but at what stays on the books.”

Goetze said it was important for agents to check themselves against the two reasons for lapses or replacements: 1) Clients didn’t understand; and 2) Clients weren’t understood.

Looking at an agent’s book of business with the goal of testing for balance is another way of determining whether the sales are consumer-oriented, said Goetze. For instance, does the agent sell a variety of daily benefits, elimination periods, policy maximums, inflation protection and non-forfeiture benefits? If not, it is very possible that he is going in with a preconceived notion of what the client should buy without first finding out what it is the client needs.

Goetze said that if agents hand in too many similar policies, “chances are they are imposing their values” on their clients.

Another means of testing for balance, Goetze said, is to look at various administrative functions connected with sales. For instance, he said, are an agent’s applications complete? Goetze said companies should look at this as “a training opportunity for agents who hand in incomplete apps all the time.”

Other indications are whether disclosures are used and whether complaints are minimal, Goetze said.

In explaining policy features and benefits, agents should make sure “they focus on what’s important,” Goetze said. So, for instance, they should spend a lot more time explaining to clients “how to qualify for benefits vs., say, a bed reservation benefit.”

Being consumer-oriented does not stop once the sale is made. Goetze said that submitting the application and delivering the policy are things agents “have to” do. But under the heading of “want to” do would be included such things as explaining the underwriting process to the client and explaining the policy, not just dropping it off. When they do explain the policy, Goetze said agents should spend “more time on the meat of the contract and less on the sizzle.”

Among the things that companies can do because they “want to,” said Goetze, are keeping the client’s advisors and children informed regarding the policy. Another important customer service that companies can provide, Goetze said, is “finding out who is going to be filing the claim” when the client needs benefits.

Reproduced from National Underwriter Life & Health/Financial Services Edition, February 18, 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.

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