Lots of us will need long term care but few of us want to discuss it. It’s easy to see why. The idea of needing help to meet one’s basic needs is depressing. Throw in the fact that you may not be able to pay for it without exhausting your assets or becoming a major burden to your spouse and/or children and most would rather change the subject. The same could be said for senior advisors looking to add a bustling long term care element to their practice. It can be a difficult subject to bring up but therein lies the opportunity.
“I don’t shy away from talking about long term care,” says Phillip Smith, a Certified Senior Advisor in Wilmington, N.C. with Market Street Advisors. “Seniors face numerous issues. They need to avoid outliving their assets while maintaining a safe, healthy lifestyle and prepare for long term care.”
“A long term care policy can protect and preserve wealth,” notes Michael Guzzo, an advisor at Mark J. Snyder Financial in Medford, N.Y. Guzzo prefers the sensible, non-emotional LTCI approach. “I bring it up at client reviews and when making future plans. It often leads to discussion. Nearly everyone knows someone who’s had challenging times taking care of an elderly relative but not everyone knows the protection LTCI offers.” LTC insurance is critical protection for those who’ve accumulated assets and want to have a choice of how their care will be provided and their wealth protected. Another proponent of the sensible-sales approach is Paul W. Rold II, CFP, CLU, with AXA Advisors in Denver. “There are some 78 million boomers growing older. Social programs such as Medicare and Medicaid will need a lot of revamping. Costs are going to be huge. Shifting some risk to an insurance company makes a lot of sense.”
“Denial” is the most common one-word obstacle to greater long term care insurance sales, explains John Noble, Unum’s director of LTC products. “Everyone likes to think that they will remain independent forever,” he says. “Statistics show that one in three people, after turning 65, will need help with basic needs or become cognitively impaired. This is not the type of heath that we envision for ourselves so many times the answer is: ‘I will remain independent forever.’ While statistics show this is not the case, it’s still a hurdle to overcome.”
Despite the resistance, someone’s getting the message. According to the LIMRA, individual long term care insurance reported a 2 percent gain in new premium sales, according to its second quarter survey. Following four years of decline, individual LTCI sales have increased for the second consecutive quarter. Total premium for the first two quarters of 2007, the last for which it has industry-wide data, was $304.6 million, with more than 144,000 new policies sold. The survey tracked 23 carriers and represents more than 95 percent of the individual LTCI market. New premium for the top five carriers combined grew 7 percent in the first half of 2007.
An evolving form of coverage
The biggest misconception may be that many feel LTCI is primarily for the very old. According to the National Alliance for Caregiving (www.caregiving.org) and the AARP, nearly 40 percent of adults needing long term care are between the ages of 18 and 64. “There’s definitely a communications issue at stake,” notes Market Street’s Smith.
“Advisors need to work with providers to put the best proposals in front of seniors. Yet what may be ideal for one prospect may not be for another.” Although some advisors may resist marketing long term care coverage due to a lack of knowledge or perceived low commissions, education is really the key to success in the field.
Providers are rolling out new communications material to promote benefits of new policies as they occur. A number of online courses exist to help advisors keep current as many states require continuing education to sell policies. “The key for any senior advisor is to understand the need for LTCI,” says Unum’s Noble. Learn about what Medicare and Medicaid will not cover.
In 2007, John Hancock’s long term care division initiated a Partnership Training series of in-person classes to help producers meet new national LTCI training requirements and learn about new LTCI partnership plans being implemented by various states.
“There is a strong demand for training,” notes Laura Vail Wooster, CLTC, assistant vice president for marketing LTCI at John Hancock, where over 3,000 producers have received LTCI education. As providers work to better their distribution relationships and ensure that advisor marketing and training needs are met, regular conference calls, online training sessions, informative marketing campaigns, legislative updates and newsletters are being used to help advisors stay at the top of their LTCI game.