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Life Health > Life Insurance > Term Insurance

LTC Insurance: Overcoming Price Objections And Cost Issues

By Phillip W. Sullivan

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The challenge of overcoming long term care cost issues is rooted in the natural resistance most people have to discussing long term care and LTC insurance. No matter what the logical side of their mind is telling them, the emotional side is battling equally as hard to convince them, “It will never happen to me.”

Knowing the challenge permits you to enter each client meeting prepared for natural resistance–opposition that may be motivated by fear, denial, ignorance or misinformation. When you expect the conversation to shift from issues to cost, you will recognize the tactic immediately and be able to keep the presentation on track.

As salespeople we also battle a perception problem that is founded in three consumer complaints:

1. “The salesperson did not listen to me.”

2. The salesperson did not understand my needs.”

3. “The salesperson did not create a compelling solution to meet my needs.”

Surmounting The Hurdles

Value-added selling overcomes this perception problem by placing and keeping the focus on the client. The technique moves the spotlight from product price and cost to value. The first step in successfully applying the technique is to stop selling features and begin explaining benefits.

Every policy feature must have a clearly defined benefit. When clients understand how they will benefit, they assign a perceived value in their mind. This value draws them one step closer to justifying the purchase of your product.

The explanation of benefits also lets clients know that you are listening to and understand their needs and concerns. So, when you reveal the cost, the perceived value of your product equals or exceeds the premium. When that happens, they will buy. Then, and only then, will clients be able to justify the premium cost.

If, however, you share the cost before creating the value, then you are trapped trying to justify the cost for the rest of your presentation. We cannot, therefore, allow the client to change the focus of the discussion until the importance of LTC insurance has been thoroughly explored and understood.

When clients say, “We already know we want it,” then we should ask, “What has helped you come to the conclusion that LTC insurance should be a part of your financial portfolio?” If clients cannot explain why they believe they need LTC insurance, then they do not recognize the product’s value.

To deflect questions about cost, I’ll say, “That’s a very important issue; we’ll get to it in just a moment. However, before we continue may I ask, is your primary concern cost or value? Are you looking for the cheapest product available at the expense of benefits or are you trying to obtain the best benefit value for your premium dollar?”

Most clients will readily agree on the latter. If, however, they stay fixated on cost, then chances are they only are trying to justify their denial and convince themselves they really don’t need the product. Serious clients are willing to invest the time necessary to examine all options fully before making their decision.

When presenting your product, you will want to focus on three objectives:

1. Use your brochure as a point-of-sale tool to explain product benefits. To do this, you must know your brochure inside and out. Never allow the client to ask about information contained in your brochure that you can’t answer.

2. Turn your product into the clients’ protection. Show them how your product benefits them personally.

3. Show how your product meets their needs and concerns. You must know why clients will buy. If they express a specific concern and your product meets that concern, explain that clearly and concisely. Clients must know that you recognize and understand their concerns and needs and that you can satisfy them.

When pursuing these objectives, we advise using the feature-benefit-close method. This method forces you to focus on the benefits of owning LTC insurance, and it prevents you from slipping into a rote list of product features without the client knowing what the features are or why they are important. The feature-benefit-close method helps clients recognize what they have to gain from buying your product.

To develop a feature-benefit-close presentation, identify policy features, then craft benefit statements for each one, keeping statements as concise as possible. Thereafter, draft closing questions. Always tie closing questions to needs uncovered during the interview. Remember, we are looking for reasons why the client will buy.

To create a feature-benefit-close statement you begin by simply introducing the feature. For example, if we want to discuss home modification, we could begin by saying, “Another great feature in our policy is our home modification benefit.”

The next step is to explain the benefit but in a way that clients can see themselves using it. For example: “Mr. Client, if you need grab bars in your bathroom, doorways widened or a wheelchair ramp installed, this benefit will provide the necessary funds for those modifications. The benefit to you is it will allow you to stay in your home longer.”

Now clients see a practical application of how they will personally benefit. We are not leaving it to them to speculate about what home modification is and whether it is important to them.

You must keep benefit statements positive. You don’t want to describe benefits being applied in a dire situation in which no one wishes to find himself. The presentation is thus an opportunity to show that LTC insurance is about enhancing the clients’ quality of life should they need care and an opportunity to ease client apprehensions about long term care in general.

Creating Lasting Value

Now that Mr. Client understands how he will benefit from home modification, you want to personalize the benefit by tying it to needs or concerns uncovered earlier in the interview.

If, for example, the client had expressed a desire to receive care at home rather than in a facility, then you would close and assign value by saying, “Weren’t you telling me earlier, Mr. Client, that if you needed care, you would rather receive that care at home than in a facility? Can you see how having a strong home modification benefit would allow you to stay in your home longer?”

What we have done is taken a feature that originally meant nothing to the client, turned it into a practical benefit, and demonstrated how the client would benefit personally by having it available should a long term care need arise. Most important, we have demonstrated that we have been listening to the client’s desires and concerns, and that we have created a compelling solution to meet those needs.

We have, in sum, created value for our product. Now clients begin to consider what they have to gain from owning LTC insurance.

Let’s recap the key points to remember when using value-added selling:

(1) Never share the cost before you create the value. By guiding clients through the interview, you help them to make an informed decision.

(2) Always tie product benefits to an uncovered need or desire. Use strong questioning and interview techniques early in your presentation to uncover client needs, concerns and desires.

(3) Create value by showing how the client will benefit personally from owning your product.

(4) Use value-added selling to overcome cost issues. Do not allow the client to back you into the “how much does it cost” trap.

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