LTC Marketers Target Pre-Retirees

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When David Murray began research about entering the pre-retiree market for long term care insurance in the Washington, D.C., area where he lives, the following demographic caught his eye: Attorneys and real estate agents were the top pre-retirees buyers in that area.

That was good news for Murray, because he had contacts in the real estate market. So, thats where he focused his energies. Now, more than 5 years later, he runs a thriving LTC practice at West Financial Group in Bethesda, Md. He has branched out from real estate agents, but the focus is still pre-retirees.

The story flies in the face of skeptics who believe pre-retirees are not a good LTC insurance market. The skeptics say pre-retirees do not have enough money to buy LTC insurance, are too preoccupied with working and traveling to think about LTC issues, and/or are too opinionated to be receptive to LTC presentations and marketing.

But experts contacted by National Underwriter say the exact opposite is true. For them, the pre-retiree marketage 55-62 or sois huge, aware of LTC, reachable and willing to buy.

But, to be successful, LTC specialists need to address pre-retiree issues and preferences, these experts add.

Keep in mind that the 55-59 and 60-64 age brackets now account for more than half the LTC insurance sales, points out James Glickman, president of LifeCare Assurance Company, Woodland Hills, Calif. “And, the average age at purchase will probably drop to the low 50s by 5 years from now.”

These individuals are receptive to LTC discussions because many now are beyond the stage of putting children through college, Glickman says. “They are also starting to see their parents need LTC. And their financial planners are starting to get into their face, saying youve got to start dealing with this.”

In addition, pre-retirees receive so many mailings about LTC and they see so many articles about it that many are much more aware than in previous eras, says Murray, who represents MassMutual. This is just “snowballing,” he says.

To reach these buyers, however, “youve got to go to the market. Go right to the niche,” he says.

For example, Murray uses “radio marketing.” A former radio sportscaster, he started running LTC ads on radio talk shows that target the 45-65 market a few years ago.

These ads did well immediately, he recalls. They started drawing 30 or so people to Murrays LTC dinner-seminars, he says, and his client base grew from there.

Then, when the federal LTC insurance program launched, he went “full bore,” running radio ads on LTC all week long. The result? “Over 300 people showed up at the next seminar,” Murray says.

More recently, he has been hosting his own Sunday morning radio show on LTC insurance. The same thing happened. “We got 20 calls about our seminars in the very first show,” Murray says.

Like Murray, L. Nicholas Hogan, president of Insurance Advisors Inc., in Gahanna, Ohio, near Columbus, offers frequent seminars.

In Hogans case, the seminars are for local associations, Kiwanis groups, Chambers of Commerce, and similar community-based organizations. Many members of these groups are in the 55-62 age range, he explains.

“This is an incredible market,” he adds, noting his firms average purchase age is 57. Many of these buyers are starting to take care of their parents, Hogan says. “They see the need, and they want to learn more about LTC.”

Also, many have money they want to protect, and they have enough money to pay for LTC insurance, he says.

Both Hogan and Murray use the seminars to educate people about LTC and raise LTC insurance awareness.

“If the sponsoring organization also endorses the LTC program, the sessions build trust, too,” says Hogan. That becomes the springboard for interested prospects.

In terms of policy features, the 10-pay option is particularly attractive to pre-retirees, Hogan says. Why? They see the cost as affordable, he says.

Example: Hogan says a healthy husband and wife in his area, each aged 55, could get a 10-pay lifetime benefit plan, paying $150 a day after a 90-day waiting period and with a compound benefit increase rider, for a yearly premium of $6,860, paid for 10 years. “Thats before the association discount,” Hogan says.

“Its up to the producer to help pre-retirees see the need for LTC insurance,” stresses Wilma Anderson, a financial advisor and principal of The LTC Coach in Littleton, Colo.

Security is the No. 1 issue for many pre-retirees, Anderson says. For example, single women in that age group dont want to burden their families, and single men are more concerned about protecting their assets, she says.

The advisor needs to listen carefully to each client, she says, in order to uncover such “buying indicators.”

To the advisor, the conversation might feel like a logical pre-planning discussion, she notes. “But, for most clients, its emotional.So, avoid using shock factors. Instead, help people see the need in their own lives. Maybe ask, have you had a family member or friend who has had an LTC experience? What was it like?”

When people tell their stories, listen to what they say, Anderson advises. “Look for issues and concerns that are important.” Then, ask: “Have you ever considered what LTC might mean to you? Have you ever considered a LTC policy for yourself?”

And, when presenting coverage and benefit strategies, link them back to what the person said is important. “This is what creates the sense of urgency,” says Anderson.

To be successful in any market, “you need to have a great product the people want to buy,” says Loida Abraham, 2nd vice president-retail LTC at John Hancock Life Insurance Company, Boston.

When Hancock decided to look into the pre-retiree market, she recalls, it boned up on the market trends.

One study indicated the No. 1 pre-retiree concern is financial planning for the future, Abraham says. Other research showed that many in this market “never think they are old(because) they are still healthy, active and even wealthy.” Another finding said this generation tends to spend more on now things than did the Depression generation.

Hancock looked at these and other findings and decided to target one market segment that will likely be attracted to its LTC product. “Were targeting the planners, not the spenders,” says Abraham.

Recently, the company debuted the LTC product it built for this market–Custom Care II. It has many features of previous products but also includes features that cater to pre-retirees who are interested in planning, she says.

For example the policy includes a “double accident benefit.” This pays for actual LTC expenses, up to 2 times the current daily or monthly benefit, in event of an accident that occurs before age 65. Many people in the target market are more concerned about suffering an accident-related disability today than an LTC event in their 80s, explains Abraham.

Return-of-premium (ROP) features also appeal to this market, says Abraham. “Pre-retirees are used to getting money back if something is not needed or the money is needed for another purpose,” she explains.

Because of that, the Hancock policy also includes a ROP feature. This pays the beneficiary total premiums paid in, less claims paid out, if the insureds death occurs before age 65. “You do have to die to get the benefit,” Abraham concedes, “but this ensures the family will get the remaining money.”

LTC insurance is a complicated sale, concedes Peter Gelbwaks, president of Gelbwaks Insurance Services Inc., Plantation, Fla. “But you can do well if you find your niche and stay focused.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, January 30, 2004. Copyright 2004 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.