Despite the increased media attention and awareness about long term care insurance, it is still considered one of the most challenging products to sell. “Long term care insurance has been available for 20 years, yet many people still think of it as a new product,” says, Shelly Kapfhammer, a successful LTCI advisor for LTC Financial Partners in Newport Beach, Calif.
Mike Ashley, president of Senior Benefits Consultants Inc. in Prairie Village, Kan., agrees. “My wife and I have been selling LTCI since 1987, and we started our own company to focus on the product in 1990,” he says. “When we started doing this, we thought that by now everyone would be automatically buying the policies just like they buy Medicare supplements. However, we’ve seen a big decline in the average age of our buyers; back in the 1990s, the average buyer age was the upper 60s, and now it’s somewhere between 55 and 60. Many of our clients are baby boomers who are experiencing their parents aging and having health problems, which in turn triggers them to consider the coverage. But the decision is primarily financially based these days, and less emotional. We’ve seen this translate into a decline in the amount of benefits people are buying. Premiums have gotten pricier, and baby boomers are still spending a lot of time and money on their own kids, which can make it difficult to pay the premiums; it can be a double-edged sword.”
Couple the financial challenges with the fact that after the sale it can be difficult to stay connected to customers; they may not need the product for 20 or 30 years, if at all. What can advisors do after the sale to stay in touch with clients and make sure their policies stay current with their needs? How do successful LTCI producers make sure they have satisfied clients who refer them to others and come back to them for future needs? Here are some proven strategies.
“It starts from the beginning, in how I sell the product,” Kapfhammer says. “Selling LTCI is an educational process to help people think about what they’re going to do if something happens in their life. Whether they elect to purchase the coverage or self-insure, I want to help them think more in a preventative mode rather than reacting in a crisis mode when something happens to their health. My job is to educate them about the coverage, sell it to them, deliver it and review the benefits that they chose. Then we need to keep in touch to make sure the policy stays current with their needs.”
“The relationship is crucial, whether it is an active, ongoing relationship or one that you revisit periodically,” says Lynn Devitt of Newman Long Term Care Insurance in Minneapolis. “Your customers must have loyalty that stems from their belief that they’ve gotten a straight story from you and they can trust you. The key is setting the foundation; LTCI needs to be talked about in the early steps of the financial planning conversation. Then later, when you come to it, your clients will be expecting it. Purchasing LTCI is a purposeful decision. We tell all our customers, ‘We believe in this product and we have all of our clients look at it.’
“I help my customers create what I call a circle of protection, closing off specific concerns as they’re planning for retirement,” Devitt explains. “As part of the discussion about retirement income, annuities, life insurance, etc., I explain that LTCI will close the circle and protect their hard-earned assets. I assure them, ‘We’re going to design the best plan for you that fits your needs; you’re going to know it’s done right.’”
“I always give my customers thorough information about how to utilize the policy after I make the sale,” Kapfhammer says. “For instance, I recently delivered a policy to a single person in her 50s. Someone who is single can designate a person to notify if something should happen and the premium isn’t paid, and I always recommend this. In my client’s case, we walked through all the possible scenarios, including giving her trustee a copy of the policy schedule page, the 800 number to call the carrier and my phone number. This way, if my client were to become incapacitated and needed to get benefits started, her trustee can call me. These details are so important; otherwise the policy could be put away in a drawer and forgotten when it’s most needed.”
“When I deliver the policy, I write notes to my clients’ children and make sure they get copies of everything,” Devitt says. “Odds are that if my customers need the product, their children will be helping them make the claim. I highlight the directions for filing a claim and write out the steps they should take. I also write a reminder that how a claim is submitted today may be different in the future, and they should feel free to let me help them at that time. I create confidence from the very beginning.”
“We have several thousand clients, so one easy way we have found to keep in touch is by sending our customers a greeting card and newsletter every year on their birthday,” Ashley says. “This gives us an opportunity to say, ‘Remember, if you have any questions or if your needs change, here’s our current contact information.’”
“I send hand-written birthday cards to my customers,” Kapfhammer says. “The days of the personal touch have really gone away with e-mail, text messaging and voice mail. Staying in contact with your clients is very, very important, especially in this day and age of immediate satisfaction of all areas of our lives. LTCI is a product you could sell and just walk away from, but that’s not smart business. I’m very hands-on and very service-oriented.”
Kapfhammer says she also sends thank you cards after she makes a sale and reminds her customers she’s there to help them in the future. “Then I keep in touch with all of my clients through a quarterly newsletter that the Society of Certified Senior Advisors provides, entitled ‘Senior Spirit.’ It’s personalized with my picture and name on it, and I get so many compliments from my customers about the great information it provides; the quarterly mailing keeps me in front of them on a regular basis.”
Devitt says she does periodic reviews and invites the spokesperson from one or two of the companies her company represents to come speak about costs and developments in the industry and other topics of interest, like how health care is changing or adult day care options.
“We invite all of our customers to attend,” she says, “and it’s a time for them to be reassured about costs and ask questions. Circumstances often change for your customers after you sell the LTCI policy, and our providers do a great job of providing very pertinent, up-to-date industry information. Often our clients attend because their own parents are now in nursing homes and they find themselves writing checks from their parents’ checkbooks; they don’t want the same scenario for themselves and want to make sure their coverage reflects their wishes.”
These meetings do more than just educate, according to Devitt. “We’re right there to help them review their policies. We set up tables so they can arrange a personal evaluation of their plan. We can talk about why we’ve recommended one company over another and discuss specific details like rate increases and health concerns,” she says, adding that she and her people tell attendees that certain companies are a better fit for specific situations, and she always tries to place the client with the best possible match. “The review process gives us a chance to reiterate why a specific carrier is the best fit, and helps develop confidence in the company. Often people may opt to add a little more coverage to their existing plans, and these meetings are also a tremendous referral source.”
“I take care of all the claims filing for my clients,” Kapfhammer says. “Too often in this industry, people sell something and walk away. Where the rubber hits the road is when my clients need the most help – when they are going through a crisis with their family and they need the product.”
Kapfhammer wants the family to call her first if there’s ever a need to make a claim. She wants to help facilitate it, to hold their hands through the whole process. She feels like it’s crucial to be there for them to help them access the benefits for the policy. She says going through the claims process helps her be a better agent, because she knows from personal experience how responsive the carriers are and how quickly they pay.
Kapfhammer makes it clear to clients, when the sale is complete, that it’s important to sit down every couple of years and review the policy. That may be too often with some people and not often enough for others, but that’s a general time table. She wants to make sure the cost and benefits chosen are keeping up with the cost of care. If an old policy needs to be supplemented because the cost of care is rising more quickly than policy, she wants to be the one to inform clients.
“I’m obviously very passionate about LTCI and I believe in it, and the bottom line is, you really need to stay connected with your customers and maintain strong relationships. Beyond that, you need to be there when the client needs you the most and help them realize the benefits of the coverage.” For more information on LTCI, go to our Web site and read “LTCI hitchhiker,” “Alternate funding for long term care,” “Get ‘em while they’re young” and “Thicker than water.”