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Financial Planning > UHNW Client Services > Family Office News

Thicker than water

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Did you hear the one about selling long term care insurance? The punch line goes something like, “Better invite the whole family. No, really – everyone but the pets.”

We know what you might be thinking: The more people brought into the initial sales meeting, the more people you, have to convince, control or at least cajole when it comes to having a senior client purchase LTCI. But it’s not that black-and-white.

Actually, involving the family in a long term care policy purchase should increase the likelihood of a sale and bring your client’s family in on the ground level, so to speak, of helping to manage that care. If you and your clients like to benefit from proactive thinking, read on.

The reasons are many
When addressing the topic of long term care with your clients, a principal goal is to separate the knowns from the unknowns. And while many things are difficult to account for, you can rest assured that – in most cases – involving the family in the decision-making process will benefit you (not to mention your client) down the road.

For one, when the whole family is present, according to Ray Smith, principal for The Long Term Care Specialist in Denver, they really get their heads around the idea that long term care is a reality that will come to affect the whole family. That’s because when a family member reaches the point where he needs those services, it doesn’t happen in isolation. Those needs affect the sons, daughters, and in-laws and ripple out much farther than just the person needing help.

“If that insurance is in place, the daughter-in-law becomes the manager of the care instead of the caregiver. That’s a world of difference,” Smith notes. “And that’s not to mention [how that care affects what] is passed on to the next generation.”

For another, if trusted relatives are brought in at the beginning, you’re much more likely to get agreement on the actual policy design and you might sell a bigger policy because the adult children don’t want to deal with what may happen should the policy run out.

And, as Marilee Driscoll, founder of Long Term Planning Month notes, “You’re also preserving inheritance so once the adult children understand that this product insures their inheritance, they’re more likely to become your advocate.”

And lastly, according to Marge Elias, LTCI specialist with Genworth, you want family members to understand the consequences of long term care insurance (or the lack thereof) on their own lives.

“I ask them to think about what the consequences will be in their own relationships if they’re going to be taking care of their parents,” Elias says. “I really focus on what their lives are like now, with their jobs and social commitments, and try to get them to see how it will affect all of those relationships. Doesn’t it make more sense to have a plan in place that will allow them to live their own lives and provide the best care possible for that parent?”

Sending the invitations
It sounds like a solid idea, but does it sound odd to throw out, “Oh, and bring your family if you’d like?” Well, it could. But if you approach the topic of involving the family as a natural step in the process, you may find yourself arriving at it organically.

You’d like to know upfront who is going to be involved in the decision.

“So as part of the same fact-finding, [you] need to bring up the point that the agent is actually recommending that trusted loved ones be present at the initial appointment. It’s a really nice way to establish transparency and credibility,” Driscoll says.

Elias takes a similar tack, really trying to bring the children into the room (physically or figuratively) because it’s essential that the clients give a lot of thought to the kind of care they’re going to need and who is going to provide that care.

“In advance of my actually sitting down with the client, I ask if they’d like me to call the family member to have them involved. I simply address it upfront and give them flexibility in scheduling to accommodate their schedules,” Elias explains. “We’ll also definitely call when I’m right there.”

Smith likes to broach the topic of involvement by bouncing around the concepts of LTCI using questions: What is your plan for when you need LTC? How is that going to be provided. Who is going to provide it? Oh, your daughter will? Have you looked into how she’s going to handle it?

Bear in mind it isn’t about peppering the client with questions; it’s about exposing the reality that many folks haven’t thought much about the extent to which LTC issues may involve their families.

Butter the bread
No matter how you choose to approach the topic, have no doubt about the upside of involving the family. First, when the adult children get a chance to meet with you and see where you’re coming from, they really get a chance to see you really are an advocate for them and are trying to make a difference in their future.

In such situations, Elias brings her experience dealing with her own mother to the table. “They need to see that you’re going to help them, and I know firsthand how valuable this product is, so by connecting with the family members, it creates a huge comfort level – both for them and for you,” she says. “I’ve always been an educator and this is my business, so involving the family helps strengthen the relationship you have with the client, and then the children often become your next clients.”

Another benefit of involving the family is that it can reduce the chance of a changed mind. “This is the type of insurance where there is often a buyer’s remorse because it’s such a big check,” Driscoll says. “And if your client talks to their family members after they’ve met with you, all it takes is somebody who questions the design of the policy.”

If that happens, the whole sale can go south, whereas involving the family makes for as solid an application as you can get.

The pitfalls
While the prospect of involving family members can certainly be framed as something positive in the sales cycle, don’t think it will be a bowl of cherries. Just like approaching a new client with the introduction of a product, an agent or advisor should anticipate some cynicism on the behalf of family members and should be just as prepared to tell the story to other family members as to the client. Smith says an agent needs to be prepared “to deal with [family members] just as forthrightly as they would with the client themselves.”

Involving more people also means inviting multiple decision makers, which can lengthen the sales process. “There’s more work involved, more clarification, more calls,” Driscoll says. However, you have to weigh that against not bringing them in and then having the sale blow up. In the best-case scenario, you want to find out who should know about the sales process and do the best you can to keep them in the loop from start to finish.

And certainly, as a professional, involving more family members opens you up to the scenario where, eventually, you’ll meet that certain individual who comes in with arms crossed and is dead set against the sale. That being the case, understand that inviting the family puts the onus on you, as an advisor, to really lead the process. If you don’t feel that’s one of your strong suits, you may not benefit from inviting more cooks into the kitchen.

Without a doubt, involving adult children in the LTCI sales process is a multi-faceted endeavor. Here are two last strategies to keep in mind if they are less than thrilled about being engaged in the process.

First, if the children do say, “No, we don’t need LTCI,” send it back to the client. If he follows the children’s advice and doesn’t take out the plan, how will it make him feel when the time comes and he needs the children’s help? Will he feel comfortable doing that?

Second, when children think about taking care of their parents, they think about it when their parents are full of vim and vigor – and that’s a totally different state from when their parents do need care.

“The parent that they’re laughing with and having dinner with is not the person they’re going to be caring for,” Elias says. That senior who is in need of round-the-clock care “is another person altogether.” Before he closes the door to any sale, he needs to open his mind to that.


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