Multilife products sold to small businesses are expected to be the leading growth area for long term care insurance sales in the near future, a survey of LTC insurance executives finds.
Simplified and lower-priced products were also expected to have the greatest growth potential, according to the survey of participants at the recent Intercompany Long Term Care Insurance annual conference in Jacksonville, Fla.
The survey, conducted exclusively for National Underwriter by Genworth Financial Inc., Richmond, Va., informally polled visitors to the conference, cosponsored by the Society of Actuaries, Schaumburg, Ill., and the ILTCI Conference Association, Woodland Hills, Calif.
Of around 90 industry executives responding to the survey, 42% predicted multilife sales to employers offered the best promise for sales growth, while 33% forecast simpler and more affordable products to offer the greatest potential.
Participants also expected professional intermediaries to be the richest source of prospects for LTC insurance.
Some 45% of respondents cited alliances between producers and centers of influence such as accountants, financial planners and attorneys to be the most fruitful prospecting technique.
Seminars for potential clients were cited by 40% are the most successful prospecting technique, well ahead of Internet marketing (cited by 9%) and direct mail (6%).
The results, while unscientific, confirm widespread experience of those in the industry, says a Genworth executive.
Working-age adults are increasingly thinking of their potential need for long term care, and the small-business market is a practical location to reach them, observes the executive, Kyle Rothery, vice president of product marketing for Genworth’s LTC insurance business.
The main decision-maker for small businesses is often a prime candidate for a solution that would solve long term care concerns for top executives and their spouses, she observes.
“It’s a lot easier for people to write a corporate check than a personal check, especial when it’s deductible as an ordinary and necessary business expense,” Rothery remarks.
At Genworth, multilife sales grew 18% in 2006, then 7% last year–still respectable in view of industry wide sales growth averaging 3%, she says.
LTC is becoming an ideal door opener to small business benefit sales, she says, allowing the business owner to offer a benefit that is also available to executives’ spouses tax free, she says.
Not only is LTC insurance a good way to start discussion with clients who are small-business owners but it’s also an effective way to establish networking opportunities with CPAs, attorneys and other trusted advisors who can introduce the producer to small business clients.
“It’s wonderful to be able to say to the advisor, ‘You don’t have to take money for this from the client’s retirement portfolio,’” she explains.
LTC carriers like Genworth have developed marketing materials such as tax guides that producers can offer to CPAs to help them understand such issues as the deductibility of LTC for C corporations and sole proprietorships, Rothery says.