Long term care insurance is a challenging sale, despite the high likelihood that people will need it before they will need homeowner’s insurance or car insurance. Potential loss of health and well-being doesn’t resonate like potentially losing a home, but the former can be much more damaging than the latter.
Too many potential clients don’t look at LTCI until they are older and the coverage is more expensive. And even then the sale can be anything but a slam dunk. Objections pop up like a steel-headed whack-a-mole, daring you to do your best to knock them down. We asked two LTCI specialists to tell us how they overcome two of the most popular objections: “Medicare will pay for my expenses,” and “I’ve got plenty of money to finance my own long term care.”
Medicare will pay for my expenses.
By Rhonda Vry-Bills
A lot of my clients thought Medicare would cover their long term care expenses. It is important for individuals to understand that Medicare is a federal health care program that is designed to cover hospital and doctor expenses after an individual turns 65. Since the beginning of Medicare, the program has expanded its benefits to include individuals under 65 for disability reasons. The primary purpose of the Medicare program is to give hospitalization and outpatient medical coverage when individuals are no longer working. Medicare did not make provisions for long term care (greater than 100 days of care) expenses.
Medicare, however, did make provisions to cover skilled rehab services. It is wonderful at paying the hospital expenses for individuals and also will pay for expenses if an individual needs to go to a skilled nursing facility for rehabilitation purposes. To qualify for this, an individual must meet the following three requirements:
1. He must spend three nights in the hospital.
2. He must go to skilled nursing after the hospital stay.
3. The facility must be Medicare approved.
Individuals who have hip, knee or shoulder replacement surgeries have a need for assistance and supervision, or individuals who suffer from a stroke may need physical, occupational or speech therapy in a skilled nursing facility. Medicare will cover 100 percent of expenses for the first 20 days in that SNF. At day 21, Medicare co-shares the cost for the next 80 days with a standard Medicare supplement.
On day 101, if the patient still needs skilled care, Medicare will no longer pay for any of these services. It is important to understand that Medicare will pay for these rehab services only as long as the individual is categorized as needing “skilled care.” The definition of skilled care implies that the individual is making progress in his recovery and is expected to return to a self-sufficient lifestyle.
The reality is a vast majority of long term care claims are not paid for skilled care, rather for “acute (chronic, ongoing) care and assisted living.” Thus, if the individual is not categorized as needing skilled care per his physician, but he has reached a plateau where he is no longer benefiting or making progress from the therapy services, the doctor categorizes the individual as needing acute care. Medicare is not designed to cover ongoing care for the remainder of the individual’s life, so it will not cover any of the acute care expenses.
As we age, we are at risk of living longer, which presents the risk of needing assistance or supervision on a daily basis. For example, today, individuals can bathe on their own without putting a lot of thought into the logistics. As we age, however, we consciously stop and think about how to get in and out of the shower without slipping and falling, thus causing a need for assistance or supervision. Again, Medicare would not cover any of these expenses, because this is not skilled care, but rather an ongoing need for assistance or supervision due to the aging process.
It is important to understand that because Medicare is a federal program, it is supported and funded by the taxpayers. There is no way the taxpayers can afford to pay for everyone over 65 – or on disability under 65 – who has a need for assistance or supervision, whether in the home or in a facility for an extended stay (greater than 100 days).
It is true Medicare will pay up to 100 days in a skilled nursing facility, but it is dependent upon the individual meeting the three Medicare requirements, and an individual has to be categorized as needing skilled care to receive any of these benefits. This is a very small percentage of benefits paid because it is difficult to meet Medicare’s requirements.
Rhonda Vry-Bills, CLTC, is the founder of Long Term Care Strategies in Des Moines, Iowa, a company dedicated to finding the right long term care strategy for everyone.
I have plenty of money to pay for my long term care.
By Wilma G. Anderson
Most people in their 60s and 70s can visualize a possible future in a nursing home or assisted-living facility. It’s real to them. But they probably don’t want to think about it. In order to make a sale, you must create the need for LTCI in your prospect’s future very early in the appointment. Ask your client or prospect if he has ever had any experience with long term care in the family. Has the health of any of his friends changed recently? Have your client tell you about what happened. Don’t interject any comments. Just listen. And, when he’s finished telling you the story, ask him how he felt about it. You need to make the scene in his mind a little uncomfortable. This is what creates the need for LTCI in the client’s mind.
Also, don’t tell your own long term care family story, or what happened to other people or clients. Why? Your prospect will certainly listen and feel sympathetic, but once again, he will think it won’t happen to him. If you don’t spend time creating need in the beginning of your sales appointment, you’ll be ready to close and the prospect will say, “You know, I don’t think this will ever happen to me.” It’s the worst thing that can happen because you’ll have to go back to the beginning and create the need one more time.
Some prospects can see the need for long term care and still not be convinced, uttering the words, “I’ve got plenty of money to pay for any LTC in the future.”
Many agents have heard this excuse from a wealthy client and don’t know how to respond. First of all, don’t get caught in the “Yes, but…” corner. Often, an agent will hear the client give this response about having plenty of money and then immediately respond with, “Yes, but…” When you get stuck in that corner, your prospect is winning. Here’s a solution that has worked countless times for me.
First, congratulate the client for accumulating all that he has. Tell him he can always choose to pay for care out of his account when the need arises. If he chooses to do that, then he will be paying dollar-for-dollar for that care. And that’s the most expensive way to pay for care.
Then, very calmly ask the client if he still has home insurance. He may think you’re a bit crazy, but don’t lose your confident look. The client probably will respond to that question by saying, “Of course.” Your next question should be “Why?” Let him explain why he keeps his home insurance in force. Then tell him he could certainly afford to pay for a new home out of his savings, but the actual risk of losing a home to something like a major fire is actually one in 1,200; the risk of needing some form of long term care in the future is three out of five. By this point, he will be listening carefully. Show your client how to pay for his premiums by using just a portion of the interest he earns on his savings. It will always make sense to the client.