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Booking More LTC Business

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Increasingly, long term care insurance agents find that financial planners are an excellent source of client referrals, notes Jesse Slome, executive director of the American Association for Long-Term Care Insurance, Westlake Village, Calif.

Agents can gain more business through financial planners by emphasizing the possibility that the clients for whom the planners have so diligently worked to build assets will suffer potential financial damage.

Planners who manage clients’ assets typically face a $10 million future risk for every 100 clients served when those clients have to start spending their assets to pay for long term care, Slome estimates. Planners can see the risk but may have misconceptions about long term care insurance protection that the agent can clear up, he says.

To gain esteem in the eyes of these professionals and do more business through them, there are ways that agents can establish credibility in their minds.

“First, there are different organizations serving financial planners and investment advisors that have local chapters,” Slome says.

One of the critical steps the producer can take is joining one or more of these organizations. At the very least, becoming a member of a local financial planner or investment counselor association gives you access to a complete list of group members, Slome points out.

Beyond that, it can also be an opportunity to exhibit at special events. Even more important, these groups hold meetings where they’re often looking for expert speakers. That’s an opportunity for the agent to talk up LTC insurance.

Taking that even further, the knowledgeable expert can develop a seminar on LTC.

“Planners, like insurance agents, need continuing education credits,” Slome says. “It’s relatively simple to create a 1-hour course that qualifies for CE credits discussing LTC insurance, its tax deductibility and how it fits into a financial plan.”

Planners clearly have a responsibility to talk to clients about LTC planning, because it affects more than just the client’s financial plan, Slome points out.

“It has an impact on the entire family,” he says. “Most financial planners who have been in business for a good number of years have clients with long term care issues. They’ve seen and understand the impact it can have on people and their families.”

Agents have to learn to talk to financial planners about LTC insurance differently than the traditional way they present it to their own clients, he notes.

“Planners look at the product differently and think about the funding for the product differently than do consumers, so it’s very important for agents to adopt a language the planners can relate to,” he says.

One approach Slome suggests is to talk about how financial planners help clients build a “retirement castle.” That lets the agent position LTC insurance as a way to build a moat around that castle, he suggests.

“That’s different than the usual way you’d present it to the consumer, but it emphasizes the important point that LTC is protection of the financial plan,” Slome says. “It’s a subtle but important way to reposition the product.”

Another way to discuss LTC with planners is to present it as a way to use a small piece of the earnings on a client’s account to protect the client’s portfolio, he adds. A new brochure available from Slome’s association (it’s online at Document Link) points out that less than 0.5% of the yearly return on a client’s portfolio return can protect the client’s assets against an LTC event.

“You’ll benefit as an agent if you position the product in a way that helps the financial planner understand the client need and realize how efficiently LTC can fund it,” Slome says.

This article originally appeared in the September 2006 issue of LTC e-Wire, an online publication of National Underwriter Life & Health. You can subscribe for free to this monthly e-newsletter by going to .


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