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February 01, 2008 at 07:00 PM
Select SMA readers offer up their best counterpunches to the most common excuses prospects have for not purchasing long term care insurance.
Any good article about overcoming objections to LTCI is bound to include direct quotes from producers out in the trenches, sharing exactly what types of resistance they face and how they have been able to overcome it to convince a prospect of the need and value of LTCI.
Senior Market Advisor just happens to have a sizable editorial advisory board made up of readers who are in the field, utilizing best practices to sell effectively every day. We asked a bunch of them who sell long term care insurance to tell us what methods work best for them.
If these common objections ever pose problems for you, you’re sure to find a fresh approach in the responses that follow. And thanks to all the Advisory Board members who contributed to this piece.
- Brian Anderson, Editor
Objection: “LTCI costs too much”
Response: I point out that they have transferred their risks with insurance except the LTC risk – which will be their greatest risk – and they can transfer that as well, for pennies on the dollar. It is always cheaper to use a portion of the interest of your savings to pay for LTC than to use your principle.
- Ronald Grant
Response: I always let clients know that I do not define this product as long term care insurance – I like to call it “portfolio protection insurance.” If you could take a small piece of the rate of return from your investment portfolio and use it to purchase protection for your entire portfolio in the event of a long term care need, would you do it? Typically you can protect your entire portfolio for a fraction of your rate of return. We have to stop looking at long term care insurance as a day-to-day expense.
- Zach Roberts
Response: People just have to be convinced that price is not the issue – the issue is protection. Paying the price out of a ready budget is the problem. One way I have overcome that is having clients just take some of the gains from an annuity and pay the premium at one time. This way it is not coming out of the budget, and the gain was to that point only on paper, so it does not seem to hurt as much.
- Paul Mooradian
Response: I show prospects that the premium cost is minimal compared to the dollar value of the benefit they are purchasing now and especially with the compounding value in the future. I also show them an evaluation of other do-it-yourself methods of covering the future LTC costs – a lump sum low-risk investment or annual low-risk investments. This is usually very convincing.
- David R. Allen
Response: They will often check with their friends. If their friend’s [LTCI policy] is way cheaper than what I am quoting, it is because they do not have inflation protection attached. After you explain what happens to the daily amount without inflation protection, the client usually sees why their premiums are higher. Personally, I will not sell LTCI without inflation protection. In the long run, it will hurt the client when the daily amount is being eaten up by inflation.
- Carlene Damba
Response: We have to approach it from the point of view of life insurance. Has anyone ever purchased life insurance unless love was there or the need to protect something very important and usually dear? Talk about love and caring and the opportunity to save agony for your loved ones, your children and perhaps even your grandchildren when it comes time to need help from the family. Stop quoting costs and details and establish that it is all about love and caring. Then when it is time to go over the problems in LTC the situation will be a caring one.
- George Perkins
Response: If you find that you need LTC later on, you probably won’t qualify for it and then the expense will be out of sight and break the bank. You don’t want to take a chance of having all your savings spent and not be able to live on the retirement you planned for.
- Dennis Brittain
Response: I can certainly appreciate that any additional expenses in today’s economy are not wanted. However, it is for this reason that it is so important that you do make the adjustment to protect what assets you currently have. Let’s face it, if you don’t make the premiums affordable now, you will not be able to afford the care that is needed if, like many Americans, you need LTC. It’s like the old saying, “people don’t plan to fail, they fail to plan.” This is your plan and it will provide you with the coverage you want with the quality of life you deserve.”
- Nick Nitkowski
Response: The only way to combat that objection is to educate clients on the current costs, and projected costs of health care.
- Greg Lewis
Response: Fortunately, most clientele I deal with is in younger age groups – 50s and early 60s. It must be explained that their purchase is for “future dollars.” I explain that their $2,000 annual premium isn’t paying for $288,000 of coverage today, although that is the current coverage available. The $2,000 annual premium is for $727,762 in available coverage in 20 years. We all want a potential higher payout in any investment for our future. This method shows that to the client in dollars and cents.
- Lynne Bahre
Objection: “The kids will take care of me”
Response: Where do they live? Would they move into your lovely home or would you have to sell your home and live with them? Do they work during the day? Would they have to quit their job to take care of you? Are they licensed nurses? Would they be able to give you a bath? Change your diaper? Lift your total body weight? People are living longer … if at some point your children were no longer able to provide your care, who will pay for the nursing home? Or would they help you “spend down your assets” to qualify for Medicaid?
- Jan Ingram-Smith
Response: I always tell them how wonderful it is that they get along so well with the children and grandchildren. The response is usually that this is a last choice, not a first. I then ask if the son/daughter are employed. How will it affect their position if they have to stay at home to take care of a parent? How will it affect the education of their grandchildren? I work on the concept of what they receive for Christmas and how much more meaningful it would be if the children donated, say, $50 a month to a policy that lasts five years. The children love the idea that mom or dad or both can be taken care of for at least five years, which allows for time to plan the estate. This gives the parents relief as to the reduction of burden, it creates relief with the other members of the family and allows time to plan.
- Timothy Sands
