To Sell Through Banks, LTC Agents Must Build Trust

By

Until about 10 years ago, the banking industry had little appetite for selling any type of insurance product. It was around that time that some financial institutions saw the writing on the wall when their older customers began cashing in certificates of deposit to pay for nursing home care.

Soon, these banks and credit unions realized that by offering long term care insurance, they could accomplish a dual mission: meet a critical need for older customers and keep those deposits in-house.

That was when companies specializing in LTC insurance developed a plan to partner with financial institutions and provide their customers with access to this coverage.

Once the pipeline was built, some banks and credit unions decided they could market LTC insurance themselves. They tried, but most attempts failed.

Industry experts agree that LTC insurance is an emotion-laden product and hence much more complicated to understand than the more familiar lines like life and health insurance. For that reason, banks soon learned, its difficult to sell via direct mail and telephone hotlines. Studies show 80% of LTC policies are sold face-to-face.

As emotional as the LTC sale can be for the buyer, the agent must possess a passion for crafting a solution for individuals and families that will meet their expectations later on when care is required. This is very much a “listen and solve” business.

Financial institutions quickly realized they could spend enormous amounts of time and money training and hiring additional employees to make the difficult LTC sale, or they could contract with experts. In the latter approach, the financial institution becomes a resource through which customers learn more about the insurance. They then buy it from a bank-approved insurance marketer.

Allowing LTC experts to sell to the institutions customers presents a challenge, however: How could banks completely trust insurance agents? How could they hand over the precious, private information of members they had worked so diligently to obtain over years of relationships, especially their high net-worth customers? How could banks be assured that once LTC specialists met with customers, they wouldnt try to sell something else that the bank did not authorize or approve?

The leap of faith isnt easy, but it is crucial. The sale of LTC insurance solidifies the relationship between a bank and its customers. When customers purchase an LTC policy, it is a sign they trust the financial institution that put them in touch with the LTC insurance specialist. Moreover, having another bank-connected product strengthens the customers bond to the bank.

Perhaps most importantly, an LTC policy helps prevent the need to withdraw enormous sums of money to pay for long term care. That cost adds up to be anywhere from $40,000 to $100,000 per year to live in a nursing home, according to the National Advisory Council for Long Term Care Insurance.

With so much at stake, financial institutions should be a resource for members and customers to guide them in the best direction for their future.

LTC insurance is different for every single customer. It takes an expert who can sit down with a customer to determine the need for a policy, discuss quality-of-care issues, assess the buyers expectations and then make the proper recommendation.

Agents must convince banks not only of their comprehensive knowledge of the LTC insurance market, but also of their understanding of the sensitive relationships between the banks and their customers.

For high net-worth customers, this may mean specially tailoring a policy to fit their specific needs, such as one with a high deductible or return of premium. For small business owners, this can simply mean handling those customers with special care, meeting their needs and requests with a consultative attitude.

The first step to building trust between LTC agents and financial institutions is knowledge.

As an agent, once youve succeeded in winning over the bank, the battle is just beginning. You then must take whatever time is needed to share with the customer your knowledge of the different kinds of LTC policies and the nuances unique to each.

This sale cant be handled with a cookie-cutter approach. Rather, it is accomplished by intently listening to the needs and desires of each customer. That can be anything from protecting their independence to protecting their assets to protecting their family members.

It is not until agents build trust with customers that they earn the complete trust of banks. Long term care specialists capture this synergy daily by focusing an experienced and trained eye on the complex interdependence of banks and their customers–and delivering results.

In a very real sense, LTC insurance creates a win-win situation for financial institutions and customers. While protecting core deposits, LTC insurance helps customers tap into and afford facilities and services that may allow them to “age in place,” either at home or in an assisted-living facility instead of a nursing home.

is director of affinity sales for Long Term Preferred Care Inc., Nashville. He is a 14-year veteran of the long term care industry. LTPC is a subsidiary of Progeny Marketing Innovations, whose parent is Cendant Corporation, New York.


Reproduced from National Underwriter Edition, March 10, 2003. Copyright 2003 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.