Can you afford the risk?

Note: This column is a continuation of the information I shared in last month?? 1/2 s column. To read that column, please click here.

Q. I work with a wealthy clientele and when I mention LTCI insurance to them, many of them reply that they have plenty of money and can afford to self-insure the risk. Can you suggest some ways to counter that objection?
A. This is a common objection that all of us hear periodically. Maybe the person does have a lot of money, but it may still make sense for them to buy the insurance. An expert in addressing objections is Deb Newman, president of Newman Long Term Care, a brokerage agency in Minnesota and one of the ten people named to the Senior Market Advisor LTCI Power List. Deb recommends using stories to counter objections, so that story telling answers the objection and prevents a confrontational conversation. This helps create a comfortable environment in which the client can better understand your point of view.

Here are two stories Deb uses when she hears the objection that “I can self-insure.” She starts the conversation by saying, “That reminds me of a story…”

STORY 1 – “An agent had a very analytical male client, and she could not get him to feel the need to purchase LTCI. She got out her own checkbook and placed it in front of him. Since the client and his wife had been paying $5,100 per month for his mother-in-law’s nursing home care, the agent asked, “Would you write a check out for $5,100?” Her client closed his eyes and said, “Yeah, I get it.” I suspect that he didn’t want to burden his own kids, let alone pay this much money out-of-pocket. We need to help people feel the need for LTC planning in the same way they buy auto insurance or homeowners insurance. They’re transferring the risk in those cases. Why wouldn’t they transfer the risk in a LTC situation?”