Baby boomers are a prime market for long term care insurance, and the workplace can be an ideal place to sell it to them.
Midlife boomers are increasingly aware that they need to pay attention to the possibility theyll face unforeseen LTC expenses after they retire. Many already are deeply involved in caring for their own parents or other aging relatives, LTC producers point out. The reason the worksite can be a good place to sell to them, producers say, is because many have the problems of their aging parents on their mind while they are on the job.
“Boomers are the caregivers,” points out Larry Lite, president, Lite Financial Services Inc., Albuquerque, N.M. And they are all too aware that ultimately they could be the care receivers.
“Many who are inquiring about long term care today are in their 40s and 50s, whereas a few years ago, it was people in their 60s and 70s,” Lite says.
Selling LTCI at work can be complicated, however. The agent will need ample time in terms of company meetings and face time with individual employees to make it work, Lite says.
“If an employer is onboard and believes truly in this type of product, it will be willing to give you enough time to put your pitch across,” he adds.
For producers, the most lucrative policies are for top executives. “More sales are going on in small businesses with 20 employees or less, because small corporations or sole proprietors might want to purchase this insurance as a key-man benefit,” Lite says.
Sharil Baxter, Kansas City sales manager and national education officer for LTCI Partners LLC, Madison, Wis., agrees.
“Where were seeing the most growth is in executive carveouts,” Baxter says. “The tax rules will allow the employer to discriminate, to decide which employees you want to cover. So, lots of businesses will pick the owner or partners only to participate.”
Many small business owners like the idea of deciding how much they want to spend on the benefit, she points out. “But its particularly attractive to C corporations because any amount of LTC premium is a business deduction to a C corporation, and most do pay the premium for their executives carveout,” Baxter explains.
Such plans are exempt from antidiscrimination rules imposed by the IRS on many executive-type benefits, Baxter says, so highly paid employees dont have to pay income tax on the employers contribution to the plan or on benefits received.
For that reason, a business thats trying to recruit, retain or reward senior managers or other essential employees will often want to add LTC carveouts as a way to enrich its benefits at a limited cost. “Its a very business-friendly benefit,” Baxter says.