Long term care insurance has confused many people for decades. What type of care is considered long term? Will I need it? Who can provide it? Are nursing homes always involved? The general public has been subjected to conflicting information and is unsure where to turn for answers.
Today, there are many signs the awareness tide is shifting. This is an opportunity for knowledgeable producers to provide much-needed information and education.
Federal officials are helping our cause by becoming more vocal in encouraging consumers to buy LTC insurance and by providing tools to make the purchase decision easier. The Long Term Care Partnership program is expanding from its initial base of 4 states. In addition–beginning in 2010 when Section 844 of the Pension Protection Act of 2006 becomes effective–consumers will be able to purchase tax-favored riders on their annuity and life insurance contracts to help fund their LTC needs.
We’re also seeing positive changes in ownership statistics. According to the Bureau of Labor Statistics, for instance, today 11% of U.S. workers have LTC coverage, up from 2% in 1991-92.
These trends and changes are pointing to better potential for sales of LTC insurance at the worksite. Until now, the LTC insurance worksite opportunity has been considered limited, primarily for executive carve-outs. Many agents and brokers have never tried to sell here, worried that the product is too complicated to roll out to a wide base of employees.
Not anymore. Employers in small businesses with fewer than 100 employees are realizing from first-hand experience how LTC needs, if left unmet, can adversely affect a business, its workers and employees. As an added plus for selling LTC in the worksite, many of these same business owners have been able to make the connection between a successful retirement plan and LTC insurance. Because of these growing influences, we’ve seen a broader interest in offering LTC insurance in a multi-life setting.
Certainly, bringing about a mindset change regarding worksite LTC insurance will be slow. Fortunately, those who pioneered worksite sales have created opportunities for future success. Adding this new frontier to your book of business may be easier than you think. From prospecting to employer buy-in, think of the following ways to open new sales in the group arena:
o Find employers who can walk the walk. Making the effort to find an employer who truly believes in the benefits of LTC insurance and has a favorable attitude is vital. The best gauge is to ask employers’ top executives if they own a policy themselves. Typically, employers who have their own plans or expect to buy one through your offering see the reason to support your marketing plan and to encourage employees to review the offering.
Next, develop and deliver a successful roll-out by integrating your marketing plan with the employer’s expertise in communicating to its employees. During the initial meeting with the employer, be sure to introduce all the discussion points that you will present to the employees and establish a comfort level by explaining what to expect each step of the way. And make sure you position the employer in the eyes of employees as an advocate for offering this valuable benefit to the group.
o Make it personal and easy. From start to finish, commit yourself to presenting the product in a way that’s understandable and easy for prospects to personalize. Long term care is a sensitive topic, and launching into jargon-laden descriptions of plan features could alienate or create confusion among employees.
Instead of trying to roll out details of each option in the beginning, start by making it a personal issue. You do that by talking to employees about what happens to real people every day who need long term care for themselves or loved ones. I often share my own personal experience right up front and see if anyone in the group knows of someone who has needed long term care but couldn’t afford it.
o Find new sources. If you already have a book of business of employer groups, now is the time to revisit those employers. In looking for prospects for LTC, consider family businesses or businesses that already offer disability income insurance or LTC coverage as executive carve-outs. Some who have purchased other types of policies through you might be open to cross-selling, particularly if offered discounts. They would also have the peace of mind of knowing that a single financial professional is addressing all their needs.
o Involve couples in the LTC decision. The addition of LTC insurance to employees’ benefits plan is more than a simple payroll deduction or product perk. It also represents a decision to help protect their future.
Because of its importance, the selection of LTC insurance is a family decision, even more so than for critical illness insurance. So be sure to let employees know that a face-to-face meeting with both spouses is better than with the individual. By bringing in both partners, you can conduct a fact-finding exercise and help set the stage for a true needs assessment. From there, you’ll be able to tailor your follow-up messages and strategies to be productive.
o Prepare people for underwriting. Imagine running a marathon and then not crossing the finish line. That’s what could happen if you don’t prepare clients properly for the standard underwriting telephone interview. Let your clients know that the call is an important step that should not be taken lightly and that it will last about 20 minutes. Explain the types of questions it will ask, such as lifestyle questions about work schedule, hobbies and exercise. Remind the applicants that they should answer all questions exactly as they did during the application process.
If you haven’t found success with worksite sales of LTC insurance, it’s time to check your approach. Don’t be turned off if you’ve tried and had a poor experience on the first attempt. Today’s employees look at the products provided through their employers as a financial foundation on which to build, and you can be the one to help them add the long term care protection they need to secure that base.