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Get 'em while they're young

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Long term care insurance. A tough sell. Even older Americans, the ones with the most immediate need for LTCI, aren’t buying policies in numbers large enough to alleviate a potential national health care crisis. Younger seniors, the second wave of the baby boomer generation – the generation that should be buying LTCI now while premiums are low and their health is still good – need to be convinced to part with their cash now for events that will occur 25 to 30 years down the road, if at all.

It’s easier said than done. SMA asked advisors to give us their take on how they sell to younger seniors. We got a story of trust from Michael B. FitzPatrick of the LTC Partnership, a story of expectations from Scott Wirtz of Net Worth Advisors Group and a personal story from Les Light of Les Light Insurance services.

A matter of trust
By Michael B. FitzPatrick
Long term care insurance is a particularly tricky product. For some clients – those advanced in age or with a pretty good idea that serious medical complications hover not too far in the future – it practically sells itself. Yet others, particularly those who are likely to reap the most reward for the least price, are hesitant to make the commitment. Why does this happen, and how does an effective advisor counter the trend?

The ideal long term care insurance client is a young senior, someone in his early to mid-50s. Mortgages are paid, the kids are safely through college and many of the financial obligations that dominate one’s 30s and 40s are no longer center stage.

Advisors can approach these clients directly with one of the two typical selling points:

  1. Younger clients are far more likely to qualify on a health basis for long term care insurance. Better health entitles clients to substantial discounts. Additionally, as younger clients are less likely to be widows or widowers, they are also entitled to marital discounts.
  2. Younger clients enjoy lower premiums. No matter how you do the math, younger clients consistently pay less for their coverage over the duration of the policy.

Both of these selling points are true, and I agree with them in their entirety. However, in and of themselves, these points have not proven to be effective in marketing long term care insurance to younger seniors.

My approach is slightly different. Clients in this age group place high value on information they receive from two sources:

  1. Trusted advisors: This includes financial advisors, accountants, attorneys – anyone who provides professional guidance. Clients depend on these sources both for the added value they provide and for their tendency to sift out salespeople.
  2. Employers: Employees have the impression that any plans they hear about in the workplace have been prescreened by management. Hence, they perceive these plans as being superior to any coverage they could get on their own.

Reaching clients through these two sources requires some initial groundwork. The focus should be on developing quality relationships with trusted advisors and employers, rather than trying to generate a high number of low-value relationships. An advisor initiates these relationships in the hopes that these trusted advisors and employers become their strongest clients, so careful selection is imperative.

Presentations to these clients should be educational in nature. Sales pitches are easily identifiable, and people will tune out what they perceive to be overt or hard-sell tactics. However, they will value and retain information that is relevant and useful for their clients. Successful presentations will be full of this type of information.

After the presentation, ask the employer or trusted advisor for his thoughts. Let him know this is the same style and content he can expect you to give to his clients or employees. This will help alleviate the natural protective instinct many trusted advisors and employers have toward clients and staff.

Additionally, this is a good time to point out the additional benefits of incorporating long term care insurance into the product offerings.

Increasing numbers of lawsuits are pending across the country, as adult children of aging parents assert that trusted advisors have failed in their fiduciary duties by never discussing LTC planning with their clients. Incorporating the agent’s presentations can bring the trusted advisors into compliance and protect against future litigation.

Employers are continually searching for educational tools to offer to their staff as an extra to promote personal development. Properly constructed and presented informative sessions centering on LTCI can fill this role easily.

At this time, the long term care insurance market has a penetration rate of less than 10 percent. The next wave of purchases is on the horizon. By laying the groundwork now, networking with trusted advisors and employers and presenting educational, informational sessions of high value, the wise advisor will be in the ideal position to catch that wave.

Michael FitzPatrick, CLTC, is co-founder of the LTC Partnership, Parsippany, N.J., which educates people about developing a plan to protect against the financial and emotional costs associated with long term care. He can be reached at (973) 394-0053 or mbfitzpatrick@

Second-wave expectations
By Scott Wirtz
The second-wave baby boomers – clients in their late 40s and early 50s – make ideal LTCI candidates. Some have already witnessed, either personally or from afar, the havoc a long term care event can wreak on a family’s financial and emotional position. Others are just beginning to see frailties emerge in their own parents that increasingly require the family’s resources. They’ve read articles in the general media on the subject, most of which espouse the idea of not only purchasing LTCI but doing so at a younger age – and yet studies continue to conclude that few have taken the necessary steps to implement a plan to address long term care contingencies.

Advisors might be well served by re-evaluating their approach in working with younger LTCI candidates, especially in the areas of time commitment involved, the environment in which LTCI is presented and the due diligence provided.

The time commitment necessary to provide quality LTC solutions to younger clients may well be more intensive than an advisor realizes. While the one- or two-call approach might be effective for some clients who realize their exposure and want to address it promptly, many second-wave boomers require much more enlightenment during this process than effectively can be transferred and digested in one or two sittings. This is a generation that has come to expect more from professionals and the services they provide.

Furthermore, these second-wave boomers want an advisor to consider their unique situation and are often active in designing their solution. It is not unusual to need three or even four meetings to help guide clients to an informed decision that makes them comfortable, which is key to selling LTCI successfully.

The environment in which LTCI is introduced to a client is evolving, and advisors might consider how they position themselves and their services with younger clients. As second-wave boomers begin to seek out advice on financial planning, retirement planning and estate planning issues, they are, invariably, seeking out an advisory team to orchestrate all of the pertinent details – which should include the topic of LTC planning.

A trusted advisor whom clients engage for planning is well positioned for a receptive and open conversation about LTCI with second-wave boomers. These clients expect LTC planning to be addressed in a broad, holistic manner, whether handled by a trusted advisor or a specialist. Second-wave boomers are reluctant to discuss LTCI as a stand-alone product solution without the involvement of a trusted advisor.

This sub-generation of boomers seeks not only education on the traditional LTC issues and solutions but also expects increased levels of due diligence analysis from its advisors to assist in the decision-making process. The second-wave boomers’ biggest anxiety might well be the fear of making a wrong choice, be it from a financial standpoint, carrier selection or plan design. Given the 30- to 40-year time horizon before they perceive a long term care issue as a threat and the history of companies exiting the market and imposing sometimes steep rate increases, this is certainly valid.

To help quell their concerns, it behooves an advisor to bring multiple carriers to the table and provide and discuss detailed information such as complete carrier financial data and ratings, LTCI-specific data, state-specific rate increase histories, plan design and policy language comparisons, and economic impact modeling. In recent years, there have emerged many excellent third-party subscription-based resources that advisors may wish to invest in to help provide quality due diligence analysis, something that can make a larger difference in the sales precess than you might think.

Advisors willing to use a holistic approach, spend more time discussing the subject and provide superb due diligence analysis will stand apart from their peers. As a result, these advisors will find the second-wave boomer market much more amiable toward their LTCI propositions.

Scott Wirtz, CLTC, LTCIS, is the LTC/DI projects coordinator and case design analyst with Net Worth Advisors Group in Waterloo, Iowa. He can be reached at (319) 232-5500 or

Use your story
By Les Light
When I was 49, my parents, then 77 and 81, bought LTCI policies from me. I had the recognition that if they were buying policies at their ages – and it was relatively expensive since my mother was not very healthy – I should buy my own and not wait. My younger son wasn’t even a teenager yet.

I figured that if I were lucky, I would make it to my parents’ age and beyond. But I also realized the odds were not on my side, and that by their ages or later, I might well need help with the activities of daily living.

Some of my insurance friends thought I was much too young to buy this policy since it might be 30 to 35 years until I needed it.

With my compound inflation rider, I’ll be in pretty good shape, if and when I do need to use my policy. I calculated that if I paid in for 30 years before using it, even with premium increases along the way, I’d get all of my money back in less than six months of being on claim.

But I’m not really worried about recouping my premiums. What does worry me is if I need help for a really long time. An AARP study suggests 50 percent of people over 65 will need care for an average of four to six years. My mother used her policy for five years. I want to be sure I’ll have sufficient protection and assets to pay for good quality care and still have a lot left over for my wife – should she need it later – my kids, grandchildren and maybe charity.

According to The Alzheimer’s Association, the average length of care for an Alzheimer’s patient is eight to 12 years. My mother’s father needed care for more than 15 years because of Parkinson’s.

On my dad’s 85th birthday, he told me he had read an article that said half of the people over age 85 would develop Alzheimer’s or dementia. He said that now that he was 85, I should “keep an eye on him.” I said if he could make that joke, he obviously was still in very good shape. The good news is that he’s now 95 and is in pretty good physical health. The bad news is he does have Alzheimer’s.

For the last four years he has been living with my sister and her husband. She’s glad for the help that enables them to keep my father at home: caregivers seven nights a week, adult day care five days a week and various other helpers.

I’m glad I bought early, while I was still young and healthy. If I had to buy my 13-year-old policy now, with the inflated benefits I have and my current health, it would cost four times what I’m now spending. It turns out it was a great time to buy. Who knew?

Les Light is the owner of Les Light Insurance Services in Beverly Hills, Calif. He has been licensed in the insurance industry since 1975 and specializes in long term care insurance. He can be reached at (800) 537-5483.


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