Whats Driving Sales Of LTC To The Boomers?
One of the things that is driving long term care insurance sales among baby boomers, says Maxine Katz, president, Especially For Seniors, Northbrook, Ill., is that boomers are discovering they are not invincible.
“Now it takes them longer to recover from working out at the gym and much longer to look as good as they used to. They can no longer just put on jeans and look good, so theyre aware of the aging process,” she says. “Also they see whats happening to their parents.”
Adding to their emerging awareness of need is that boomers are seeing first-hand that neither the government, nor their children are likely to finance their long term care bills, says Steve Olivier, director, agent sales, Blue Cross Life & Health, Newbury Park, Calif.
But even when boomers decide they need a plan for covering LTC costs, it can be months before they actually figure out where the money will come from.
“LTC is not an easy sell,” Olivier says. “Ive talked with a number of agents whove said its taken individuals a year or two before they say yes. “
The delay usually stems from the client not taking the need seriously when first approached about it. Also, many are trying to get their basic finances in order, according to Olivier.
“There are certain people who are very good at planning and accounting for their money and they budget,” he says, “and there are others who arent so good.
“As an agent, part of the responsibility is to make them understand this is something theyll need in the future; once the seed is planted, then theyll look for ways to set aside the money they need,” Olivier says.
The boomers Katz works with are affluent and generally carry more life insurance than they need.
In order to find money for LTC insurance coverage, Katz advises they get rid of the excess life insurance and poorly performing stocks.
“Once the need is developed, the money can be found,” she says. “It takes reviewing of their financial picture.”
When there is no cash available, Katz offers a program that can be paid on a monthly basis, or has the client consider a 10-pay policy, paid for in full in 10 installments.
Boomers “dont realize how inexpensive coverage is when theyre in their 40s,” Katz says. “We show them what it costs when theyre 55 in todays market, let alone adjusting for inflation.”
Nancy Boari, long term care specialist with the Northwestern Mutual Financial Network, headquartered in Milwaukee, Wis., says obtaining adequate LTC coverage is increasingly a concern for boomers because they know they are likely one day to be in the position their aging parents are currently in, and their greatest fear is dying alone in a nursing home.
In case LTC is needed, the best-case scenario for boomers would be receiving care at home, she says. If that is not an option, most boomers want to be able to pay for a stay at an assisted living facility.
“Whats pushing LTC is the product offers so many other venues for care than a nursing home,” Boari says.
“Boomers also are buying because they dont want to be a burden to their children,” she says. “Many of them are being put upon by their parents, and they dont want to do that to their children.”
As far as finding the money to pay for coverage, Boari puts together policies that are conservative, structuring them so they will pay 50%-60% of their LTC costs, should they be needed.
“You dont have to overspend on this product,” she says. “The goal is to create peace of mind and make it affordable, because you dont want the client to drop it once theyve bought it.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 28, 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.