“I am not in the long term care insurance market” is a refrain that I hear from a lot of producers in the financial planning community when I describe myself as an LTC insurance specialist. An explanation usually follows that they either work within the affluent market, where all of their clients can self-insure, or that their clients are too young for long term care insurance.
Then you hear the real explanations: “Long term care insurance is too confusing.” “I don’t want to waste my time on it.” “I prefer to focus on group business, investments or life insurance.”
Admittedly, there are a lot of options with LTC insurance that can be tricky, and there is less compensation in selling it compared to some other lines of business. However, you are doing yourself and your clients a disservice if you are not speaking to them about addressing their own potential LTC needs or those of their parents.
Let’s assume for argument’s sake (although I would disagree with this analysis) that you cannot find any way for LTC insurance to ever add significantly to your bottom line, given the complexity of the product and the commissions involved. I would argue that it still makes sense to be in the business of providing advice about this coverage. Here’s why:
Can every one of your clients self- insure? If every one of your clients has a net worth in excess of $10 million, then I would not argue with you about ignoring LTC insurance, since they can self-insure. (Although many of our clients with those kinds of assets still see the value in passing this risk off to an insurance carrier.) While many planners strive to work only with clients with a high net worth, it’s inevitable that you have some clients who do not have those kinds of assets.
These clients may be the friends or families of your best clients. While they may have a lower net worth, they are important to your best clients, and thus just as important to you.
Then, too, you may have your own friends and family as clients who have asset levels that don’t allow them to comfortably self-insure. Likewise, you probably have clients with whom you worked when you just entered the business who may not have the financial resources of your best clients. But you are loyal to them, since they had faith in you when you needed them.