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Selling LTC Insurance To The Young At Heart

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There are about 35 million people over age 65 in the country today. Doctors define them as geriatric patients. That makes them sound old.

For some, growing old is one of the most difficult periods in their lives. But for millions of older Americans, life is filled with jogging, swimming, tennis and golf. They’re the young at heart–people who are exercising, living healthier lifestyles, watching their diets and receiving regular physical exams. For them, age is perceived not as a number but by their thoughts and activities. They’re as young as they feel, and they feel very good.

More and more of them are also active on other fronts at an age when their parents and grandparents already had retired. Many continue to work part or full time. Some pursue avocations. Others start brand new businesses and become dedicated entrepreneurs.

Many of these individuals were once covered by their employers’ liberal employee retiree benefit programs, some of which now have been reduced or terminated. So, a large number of seniors and boomers may no longer have the insurance they need–yet they continue to be overlooked by some insurance/financial professionals. This is unfortunate, because marketing is all about filling voids, and the biggest void this specific group has is the lack of LTC insurance.

In an uncertain world, one thing is surely certain–times and situations do change and sometimes for the worse. It could be the diagnosis of a life-threatening medical condition, the advent of Alzheimer’s, or being in the wrong place at the wrong time and suffering a catastrophic accident. It could happen while doing everyday chores around the house, driving a car or crossing a busy street. It can happen to anyone, at any time.

Yet, if asked, the majority of these young-at-heart individuals would tell you they don’t believe anything bad will happen to them. And while some acknowledge they may need long term care–they may even know someone who is receiving such care–they would rather not talk about it. They are clearly in denial.

In spite of all the current media attention being given to changes in the Medicare program, and problems with Medicaid, many people aren’t paying attention. That is why it is so important for LTC insurance professionals to continue to deliver the facts to those who seem to have little or no knowledge of the perils they could face. It is the LTC agent’s job to convince them just how serious those risks are.

Whether selling one-on-one, within worksite marketing environments or at LTC seminars (an especially effective way to reach seniors and boomers), having a positive and persuasive presentation that tells the truth about the need for LTC insurance will clear up the misconceptions most people have about the coverage and overcome their resistance to buying it.

It all begins with developing a list of prospects. Start by checking client and prospect files to see who already has LTC insurance (most don’t). Next, check with the numerous local clubs and associations whose senior and baby boomer members may need LTC insurance. Don’t overlook the younger people. They also need the coverage. In fact, over 40% of the functionally disabled people in this country are between the ages of 18 and 64.

Establishing strong relationships with local CPAs, financial planners and lawyers can be a great way to reach even more prospects. Many have clients in need of LTC coverage. (Our experience has shown that even people having elaborate financial plans are often still at great risk because LTC insurance wasn’t included in their plans–an obvious void waiting to be filled.)

Using the list of prospects, concentrate on the best way to reach them and quickly gain an interview. The ultimate goal is to make presentations to as many prospects as possible, explaining the substantial LTC risks they face, and helping them to protect themselves by selling them the coverage they need.

The reward, in addition to the additional flow of commissions and renewal income, will be in knowing that the LTC agent has helped these prospects avoid what may be the most devastating financial problem they will ever face–paying for LTC. Today, that cost can run upwards of $70,000 a year, and twice that in some metropolitan areas. Very few people can afford that kind of expense for very long, if at all.

Following are ideas for overcoming some of the more common objections the agent will encounter along the way.

Americans continue to believe they’re covered for LTC expense. They’re not–except for Medicaid, which does cover some LTC expense. It’s a welfare program, so the chances are slim to none that clients and prospects will qualify for the coverage until they have exhausted their savings and most of their assets.

In addition, Medicare, Medicare supplements, and their individual and group health insurance policies do not cover LTC. That means most clients and prospects are entirely on their own when the time comes to pay for LTC. Many people try to game the system and find ways to qualify for Medicaid by transferring their assets. Some are successful. But most are too busy, or don’t do any planning at all.

Perhaps the most important message to give prospects who still believe the government will pay for their LTC expense is that Medicare and Medicaid are both having serious economic problems and can no longer be considered the entitlements so many expect them to be. Point-blank, it’s within the realm of possibility that these government programs may not be there in their present form in the future.

Some authorities say Medicare is in worse financial difficulty than Social Security. More and more doctors are no longer taking new Medicare patients. Some have stopped treating them altogether. Medicare will pay up to 100 days of care in a Skilled Nursing Unit (SNU), but many patients may receive only a few weeks of such care because they are “no longer making progress.” No progress means no more SNU care.

To make matters worse, reimbursement for care in an SNU is being cut drastically and a number of hospitals are closing their SNUs.

Medicaid will provide some LTC coverage for those who qualify, but qualification is becoming more difficult. Many states are reducing Medicaid funding and are becoming more selective about whom they will cover. In addition, more and more states are now going after beneficiaries’ estates to recover money the state paid for their care.

The Medicaid of today isn’t what it used to be. People who have given up their assets in an attempt to have Medicaid pay for their LTC expense may be greatly disappointed about where and how they will be cared for. And those who were able to pay for their own LTC might now wish they had kept their money so they could have real choices.

For these reasons, the best, and really only solution, for people who can afford it is a well-tailored LTC insurance policy.

Prospects often say they don’t need LTC insurance. Or they say it’s too expensive. Such comments are meant to throw the agent off balance, to prevent discussion of LTC issues. Expect this, hear it, acknowledge it and then move on.

To be successful in selling LTC coverage, agents need to know some things about the prospect before beginning the presentation. (See the box for examples.) If these factors are not yet known, do a good job of fact-finding before you begin the presentation.

Once this is done, cut to the chase. Explain the risks the prospect faces and why the person needs LTC insurance. Once that is established, show them an LTC plan tailor-made to fit their specific needs and budget. If they already have a financial plan–which is often overlooked by some LTC agents–stress that even the best financial plan is doomed to failure if it doesn’t include LTC insurance. That is the glue that holds it all together.

While some prospects don’t want to be a burden on their families, others will argue they don’t need LTC coverage because their family will care for them. They may honestly believe this, but it seldom works out. In most cases, family caregivers will soon find they are unable to take the physical and emotional stress and begin seeking other options. The agent needs to get past this. The best way is to tell the truth–that, in the majority of cases, it just doesn’t work.

There is a lot of confusion concerning the needs of the aging population such as uncertainty regarding their living arrangements, who will care for them and their need for LTC. The LTC need continues to threaten their financial security as well as the emotional and financial well-being of all Americans.

What is certain is that Americans are growing older. By 2020 about 53 million will be over age 65, and 6.5 million of them will the “old old”–those over 85, the majority of whom will need some LTC. The government is not going to care for them. Most families can’t afford to. And those who are working can’t afford to, either. So, it’s up to each person to provide for his or her own LTC needs.

One problem the LTC industry faces today in getting the message out is that there are not enough agents selling the coverage. More are needed.

Those not yet in the market should not pass on the opportunity that this fast-growing market offers. After doing the homework and understanding the products and market, they can use the skills gleaned from selling other types of insurance to build up a practice in LTC insurance.

Seniors and baby boomers may be young at heart, but they are still growing older. It’s obvious that many of them are not hearing the LTC message, and it’s up to the LTC professionals to make sure they do.

John Wane is president of American Independent Marketing, Yakima, Wash., and can be reached at [email protected] Lenny Anderson is president of GoldenCare USA, Inc., Plymouth, Minn., and can be reached at [email protected]

Medicare and Medicaid are both having serious economic problems and can no longer be considered the entitlements so many expect them to be

In most cases, family caregivers will soon find they are unable to take the physical and emotional stress and begin seeking other care options

Check It Out

Things To Learn About LTC Prospects

üWho they are and what are their economic means?

üIf they are working, what is the nature of their income and other financials (savings, investments, homeowners’ or renter’s insurance, life insurance, and group or individual health coverage)?

üIf nearing retirement, do they also have a financial plan?

üIf retired, are they receiving a pension and Social Security benefits? Remember some may no longer have benefits they once had from their employer’s retiree benefits program.

üDo they have LTC insurance (most don’t)?

üWhat is the status of their health?

Source: John Wane of American Independent Marketing, Yakima, Wash., and Lenny Anderson of GoldenCare USA, Inc., Plymouth, Minn.