During the 2004 presidential election campaign, there were frequent references to the term “bounce”as in “President Bush received a significant post-convention bounce in his bid for re-election.”
Bounce may well describe some of our post-hurricane LTC sales success here in Florida. Four hurricanes later, many people took stock of their security, reinforcing both homes and financial portfolios. LTC became a part of some of this revisited planning.
Many of these sales went to younger buyers (under age 60) as they contemplated their future and tried (with our help) to plug the gaps they could identify. This was not just a “blue tarp” temporary solution but more of a “storm shutters” permanent approach to asset and income protection.
This makes an important point: Younger prospects for this coverage abound.
Im not suggesting that the LTC insurance industry completely ignore the elder market. There is still plenty of work to be done in the over-age-65 demographic with respect to LTC planning and protection. Yet there are many more ways to work LTC into the specialists regular sales efforts than just focusing on the 65+ market.
Here are some ideas:
Health insurance prospects. Many people are buying individual health insurance today for a variety of reasons. It is easy to demonstrate that health insurance is geared to acute and intensive care issues, not long-term chronic health conditions. Consumers are used to “upgrading” when buying. LTC insurance can be a great add-on sale here simply by reviewing the minimal ways in which health insurance addresses the LTC need.
Key employees. Employers always are looking for ways to retain key personnel. Packaging LTC (and a limited pay period) in conjunction with any type of pension or retirement plan can demonstrate that employers are doubling up on behalf of the employees future. Contributions being made by an employer to a 401(k) can help the employee build up money to live on later, while LTC can help protect these dollars from erosion and use them for the task they were intended. And its all tax-deductible to the employer.
Wealth accumulation. Young people today are more into investing and the market than the boomer generation was at the same age. This is a good thing. Yet typically overlooked is that with all this focus going into accumulating wealth for the future, there is an ongoing assumption that simply because the individual started early in the savings aspect of life, the persons financial future is assured. This ignores the vulnerability that any of us has to experiencing an extended illness or accident. Why should these forward-thinking people risk all the terrific financial starts by not protecting their ability to accumulate? Auto accidents and strokes are significant disablers for people under age 60. In that case, you could call LTC “401(k) protection.”
Life insurance clients. Life insurance is sold to protect assets and provide income. LTC insurance, coincidentally, is also asset protection and carries indemnity riders that can provide income. It should be relatively easy for the advisor, while discussing the subject of assets and income, to introduce LTC into the conversation.
Tax savings. There are opportunities for individuals to pay for LTC insurance on a tax-savings basis. Business owners, even those not in a C Corporation, get at least some “bounce” in their LTC premium from a tax break. In 2005, sole proprietors, partners and S-Corporation owners can write off up to the following annual premium amounts on their own personal coverage: age 40 and under, $270; ages 41-50, $510; ages 51-60, $1,020; ages 61-70, $2,720; and ages 70+, $3,400. This can help make a sale. Not long ago, a female S-Corporation owner bought LTC for herself at age 58 and her husband (age 64) primarily because of the write-off. She only could deduct part of her premium but all of his, the more expensive policy. This was more than enough motivation.
Health Savings Accounts (HSAs). Certainly, the creation of HSAs will lead to a swing in the type of health coverage purchased by individuals in the future. Many younger people will not likely need to access their accounts for medical expenses in any significant way for some time, letting money accumulate. These pretax dollars can be withdrawn to pay for LTC insurance premiums, giving the individual a tax-deductible way of paying for the coverage. HSAs can represent an easy tie-in with LTC, as noted above.
Florida is bouncing back, slowly but surely. Directing our LTC efforts at younger buyers in a multitude of ways is helping to erase the memories of the 2004 hurricane season. Heres to a successful and less weather-eventful 2005!
is the author of The Long-Term Care Handbook and How To Sell LTC Insurance, both published by The National Underwriter Company, Cincinnati, Ohio. He can be reached at email@example.com.
Reproduced from National Underwriter Edition, January 20, 2005. Copyright 2005 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.