The lack of long term care insurance’s success in gaining traction and penetration has been one of the most baffling and enduring disappointments the insurance industry has known.
The reasons are well known and legion. It’s a hard sell. It’s expensive. The public is in denial. People are drowning in misinformation about what the government will do about LTC.
These may all be valid, but to a true believer like me, it is really regrettable that this product is experiencing such a difficult time in the market.
For a while, the great hope was that when federal employees were able to sign on for long term care insurance, it would provide a stimulus for the market as a whole. This doesn’t seem to have happened yet, and indeed, may not happen at all.
What brings this situation to mind is a panel discussion I moderated last week at the Boomertirement Industry Summit sponsored by the Million Dollar Round Table in New York. As usual with anything the MDRT puts on, it glistened with professionalism and went very smoothly.
My panel was on “Protecting Boomers’ Assets and Independence” and the speakers were Brian Ashe, who was MDRT president in 2000, and Harley Gordon, president of the Corporation for Long Term Care Certification.
We had informally called the panel the “Lifeboats” panel. Brian was to talk about life and disability insurance, while Harley was to discuss long term care. Another speaker, Tom Lawton, was to talk about critical illness insurance but got sick the night before and couldn’t make it. (No jokes, please.)
In any case, Harley’s point about why LTC insurance sales have been so poor is that the product’s been sold wrong. He believes that trying to sell it by highlighting LTC risks is a non-starter and that risk doesn’t move the client to buy. Why? Because the client will concede the statistics but end up feeling (and perhaps saying), “It’s not going to happen to me.”
Harley’s argument is that LTC insurance has to be sold by making clients see the consequences of not having the product. And these consequences mainly deal in how devastating to the client’s family and loved ones it can be if LTC expenses are not provided for.
He’s got a point. This is, after all, by and large how life insurance is sold. You remember how the Life and Health Insurance Foundation for Education promotes life insurance: “Life insurance isn’t for the people who die. It’s for the people who live.”
Harley also said that prior experience–that is, having already seen a parent through a long term care situation–makes people true believers or gives them religion. I couldn’t agree with this more, since that’s what happened to me.
There’s more that can be done, however.
Last week we ran a letter from Paul Bunkin, CLTC, who had another idea about how to boost LTC insurance sales: Advertise. “The lack of credible and recurring advertising on a national level keeps LTCI as one of the least understood insurance products. People, generally, don’t want to think about LTC, and the lack of advertising information reinforces their denial to address this issue,” Bunkin wrote.
He mentioned the Aflac duck and Geico’s gecko as bringing instant recognition.
I’m with you, Paul. All we need is a marketing genius to come up with the right animal to make long term care insurance warm and fuzzy, funny or endearingly annoying. Or all 3 wrapped into one.