Ways To Help Consumers Evaluate LTC Insurance

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To buy or not to buy long term care insurance is a dilemma being faced by 73 million Americans age 50 and above. But in spite of that vast and ever-growing market potential, many LTC marketers are failing to recognize what is needed to motivate millions of consumers to evaluate LTC policies.

Fortunately for actuaries, its estimated that 40% of the market will never have the need for private LTC insurance. This fact results from a number of alternatives that include Medicaid and other federal assistance programs, services available from informal caregivers, self-insurance, reverse mortgages, annuities, life insurance, and death itself.

But, since no one knows who will be in that 40%, most people do need to be looking into this issue and considering their options, especially the option to buy private coverage.

This begs the question: How can you, as a producer, help consumers make this all-important decision? Well look at a few ideas here, based on what consumers tell me they want and need.

Whether they are considering buying policies for themselves or assisting a parent in this most important decision, consumers tell me they want to hear straight talk that includes objective educational information that helps them make informed, rational decisions.

They dont want, and dont deserve, self-serving hype, confusion, and emotional blackmail as part of any sales presentation. Without being reminded, most adults are already concerned about disabilities in their later years–disabilities that could impact their hard-earned nest eggs and rob them of independence and dignity in their golden years.

What they do need is help deciding what to do about that concern.

You can assist in this by encouraging consumers in your community to do a good deal of homework on their own before selecting a sales representative.

This includes suggesting they read books on the subject, guides published by state insurance departments, and brochures from the National Association of Insurance Commissioners. It also includes encouraging them to discuss the topic with friends and neighbors who have purchased the product, as well as to consult with professional advisors.

Then, when it comes to finding an advisor, people say they prefer an agent or broker with whom they feel comfortable. Therefore, be aware of this, and if you sense discomfort, by all means bring the topic up. Let the client say whats on his or her mind.

Keep open the option of making a recommendation that the client obtain a second opinion, if that seems necessary.

(Note: In general, I encourage consumers to look for sales representatives who are able to deal with more than one insurer, so they can meet multiple needs. I also encourage them to seek out representatives who have a working knowledge of the differences in the policy forms offered by the different companies, for the same reason.)

If your clients have done their homework, they should be informed enough to address their needs with you. But before making an appointment for a LTC sales presentation, consider asking them to take the two action steps shown in the chart. If they do, this should help you make the discussion specific to the situation.

Then, during the sales presentation, encourage your prospects to ask questions. Discuss needs and objectives.

When you start talking about the coverage itself, be sure to help your client understand not only the entire application process but also the various policy features. I am referring here to the benefits and options available, the benefit triggers, the annual premiums for different daily and yearly benefits, any extensions of the home care benefit, the different bells and whistles (that often confuse applicants), and the risk of future premium increases.

Also take time to provide your client with a thorough understanding of just how any one insurance carrier would treat an applicants insurability. In addition, check to be sure that paying the premium quoted will not alter your clients lifestyle and quality of life.

Even when clients have done their homework, the decision-making can take time. My advice is to be vigilant against pushing for a one-interview close when people hesitate. In fact, avoid pushing anyone about this at any time.

Give people time to digest what you have said and what they need and want. Give them encouragement, as well. They can make the right decision.

Finally, remember that it is in your best interests to have an informed consumer as a client.

, Chestnut Hill, Mass., is author of J.K. Lassers Choosing the Right Long-Term Care Insurance, a book for consumers; edits the Just For Seniors newsletter; and is a multi-line insurance broker. He can be e-mailed at benlipson@aol.com. This article first appeared in the June 2002 LTC e-Wire, an online publication of National Underwriter Life & Health Edition.


Reproduced from National Underwriter Life & Health/Financial Services Edition, August 19, 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.