Educating Clients On LTCI: Still An Uphill Battle

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Producers say educating consumers about their need for long term care insurance is still an uphill battle, with no signs of it getting easier.

This belief is supported by a recent MetLife Inc. study that shows most Americans between 40 and 70 years of age lack the information they need to make informed planning decisions for their future LTC needs.

“Theyre closing their brain when you talk to them about long term care because they have an entitlement attitude,” says Kathy Halverson, an LTC insurance specialist with Long Term Care Consultants, Green Bay, Wis.

Corroborating that view is MetLifes finding that almost 40% of older Americans mistakenly think LTC is an entitlement for those who reach retirement age, something like Medicare.

“Also, many 70 or older think their kids are going to take care of them, so they are not concerned about it,” says Halverson.

“Baby boomers have had it nice,” she says. “Theyre often broke, theyre mortgaged, but they think the rest of their life is going to be the way it is now. Its discouraging for all agents who are so passionate about long term care insurance.”

Producers need to concentrate their educational efforts on those between 40 and 50 years old, she believes, because information aimed at that age group is more likely to pay off.

But even there, dont expect a receptive audience, she advises. For instance, Halverson recently saw only 30 people sign up for an LTC seminar she was presenting at a local chamber of commerce luncheon that normally draws more than 100 business people.

But shes still going ahead with the seminar. Its titled, “Whos going to take care of the sandwich generation?” To get her audiences attention, she starts off by telling some stories about her own clients who did not have adequate coverage when they needed it.

For instance, she often tells audiences about a couple aged about 62 who took 6 weeks to make a decision about an LTC policy Halverson proposed to them. By then it was too late, because the wife had just been diagnosed with Alzheimers disease.

She also tells success stories of those who were adequately covered at a critical time in their lives. Such anecdotes encourage seminar participants to talk about LTC with their spouses when they go home that evening, she says.

A seminar “cant be all about how to buy a long term care policy,” she says. “A lot of agents go on too much about things like plan choices.”

Halverson advises producers to team up other advisors such as attorneys, CPAs and agents who sell different financial products. Those individuals already have a trusted relationship with the client, so they can provide credible education about LTC insurance. And then they can refer the client to the LTC specialist for follow up.

Halverson has such a relationship with a local bank. The banks financial advisors ask clients if they have LTC insurance and often refer them to Halverson even if they have a policy, so she can review it.

“Having a third party work with you is an effective way to market because the client has been sold already on the need for the policy when I get in touch with them,” Halverson observes.

Working with other advisors is a smart tactic for the LTC specialist, agrees Paul W. Pendorf II, an agent in Laguna Niguel, Calif. “I try to hook up with someone prospects are already doing business with, such as a broker, financial planner or an advisor who is selling them annuities,” he says.

The idea is to borrow the authority and prestige of someone on whom the client relies and who does not have a financial stake in LTC insurance, says Pendorf.

Sending prospects information from other objective sources is effective, too, he notes. “It says, Look, someone with credibility says this about long term care.”

For instance, Pendorf regularly sends potential clients the National Association of Insurance Commissioners Shoppers Guide to Long Term Care and relevant articles from recognized consumer publications. The mailings are sent to a database of prospects Pendorf has built up from years of cold calling and referrals.

“Once you have them in your database, you have to send something informative every quarter or at regular intervals, such as a newsletter, just to stay in touch,” Pendorf says. “Once theyre educated, theyll spend $2,000 to $6,000 a year in premium. Its big bucks. But until then, its a massive education job, even more so with those in their 40s and 50s. You have to try to make them aware of the problem that Medicare doesnt cover long term care. I dont think most people have thought out how much it could cost them.”
This article first appeared in the Oct. 18, 2004, issue of LTC e-Wire, an online publication of National Underwriter Life & Health.


Reproduced from National Underwriter Edition, November 4, 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.