Bank Reps, Customers Share Doubts About LTCI
Bank insurance representatives and their customers both share similar fears about long-term care insurance, although from different perspectives, observed Gregory D. Vacca, first vice president, Cal Fed Investments, during the recent Financial Institutions Insurance Associations fall conference here.
For instance, bank agents and financial advisors fear that the potential revenue from a sale of long-term care insurance is not worth the risk of losing the customer, if they push too hard to sell the product, said Vacca.
(Cal Fed Investments was recently absorbed by New Yorks Citigroup when it acquired California Federal Bank in Sacramento.)
For their part, some bank customers think the benefits of LTCI are not worth the risk of making the wrong decision in buying the insurance, he noted.
Vacca said that the rep who is afraid to push too hard should learn more about the products benefits because the insurance can actually help retain the customer for the bank, thereby offering opportunities to cross-sell even more products.
To allay the customers fears, the proper approach is to sell LTCI as part of the individuals financial plan to protect their assets so they can pass them on to heirs, Vacca advised. That keeps the customers money in the bank.
From the financial advisors point of view, it is also a profitable sale. Vacca noted that at Cal Fed, the average LTCI sale was $2,000 vs. $1,000 for the average investment sale.
However, a typical LTCI sale requires much more time than an investment product sale, Vacca observed.
To cut the sales effort down to size, Cal Fed uses a three-step approach.
The first step is a two-month sales program that includes statement inserts, brochures and a telemarketing campaign.
Step two is to invite qualified customers to a bank-sponsored seminar on LTCI.
In step three, bank financial advisors follow up by making appointments to visit individuals in their own homes to discuss the insurance.
Selling LTCI doesnt just benefit the policyholder, Vacca concluded. Once long-term care is needed, families of the policy owner appreciate that their loved one has the insurance.
“You may have helped the customer put together a mountain of money,” he pointed out. “But when long-term care costs dwindles it away, [the family] will ask why you didnt take care of it.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, November 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.