You may have leapt numerous hurdles on the way to selling long term care insurance policies. And, while closing the actual sale may have been a challenge, often the real work comes after the deal is made.
Providing excellent service means keeping in touch with clients to be sure they’re satisfied and understand the terms of their coverage, and also letting them know of potentially helpful modifications and updates to their policies. A comprehensive long-term care strategy should address four inter-related components: education and awareness, long term care financing, healthy aging and caregiving. Additional sales and business-building opportunities are often the result of providing full service, which means being your clients’ number-one, go-to person.”Service is a major issue and one of the most difficult aspects of selling long term care coverage,” says Alfred C. Clapp, CLU, of Financial Strategies and Services Corp. in Bronxville, N.Y. Clapp, who’s been specializing in LTCI sales for over 15 years. Clapp says senior advisors need to be aware of two basic categories to create a thriving practice. First, be sure clients understand which claims are covered by their policy and which are not; second, be your client’s elder-advocate – as they age, very often their situations become increasingly complex. Having a Rolodex full of contacts from elder lawyers, to trust-and-estate specialists, to nursing home personnel can make you an invaluable resource and open a referral stream.
“The successful long term care advisor does not sell,” counsels Clapp. “He guides.” The image of the trusty senior guide is no exaggeration as growing old in America is nothing if not complex. For some 76 million aging boomers, the cost of long term care promises to be one of the largest expenses they’ll face. Private nursing home and home-care costs are regularly rising with the average cost for one year in a private nursing home room possibly hitting $100,000 soon in some states. Plus, as seniors’ requirements change, it is important to have a flexible policy that will help meet the variety of evolving needs. Consider that in-home care options continue to increase due to strong consumer demand; any policy you recommend should have a provision for this. As clients want advice and policies that address specific needs, an LTCI policy should provide coverage for Alzheimer’s disease while including an inflation-protection option – plus a guarantee the policy cannot be cancelled. An “outline of coverage” to systematically describe the policy’s benefits, limitations and exclusions can be useful when comparing a policy against others.
“While a client usually looks comfortable when going over a policy in the office they very often become confused soon after,” says Eric Cima, CFS, an advisor in Libertyville, Ill., with a growing senior clientele. To alleviate any misunderstandings, Cima’s office takes the initiative and invites clients back within three months for a review. “The service does not end once a policy is signed. That’s when it begins. We make sure they understand what’s covered and are aware of waiting periods and any other potential issues. They know they can call us any time for help. There’s no substitute for in-depth, client-focused, personal service in this business,” says Cima.
“A senior advisor’s got to determine what type of practice he wants to oversee,” says advisor coach Ken Unger of Roseville, Calif. “It’s important to remain visible to your clients but this is where a lot of advisors stumble. They may be killer closers but if they’re not good at client follow-up then they’re very likely not as productive as they could be. No client wants to feel forgotten.”
Unger recommends advisors wishing to grow their practices “reach out” to clients 15 to 20 times per year. “Selling long term care should be the starting point,” he says. “Use it as a launch pad to make them better clients by being a better advisor. A business plan is not a marketing plan.”
Client contact does not need to be face-to-face. Electronic and print newsletters can provide adequate contact to let clients know of other potentially helpful services or impending policy or legal changes. Social/educational events can also help grow a long term care client into one receiving greater services from your firm.
“When there’s a relevant change in the law we make sure our clients know about it,” says Cima. “This is the kind of value-added service that makes them remember and recommend our firm. We’ll tell clients about changes and why they may be significant.”
“When someone’s considering long term care coverage,” notes Clapp, who organizes several seminars a year that address aging issues, “chances are they need help in other areas. This type of scenario opens the door to other opportunities and increases referral potential for a job well done.” Concerns long term care prospects commonly have are generating an inexhaustible income stream, leaving a legacy, making charitable contributions and asset protection.
“There’s no one-size fits all approach for addressing the needs of an aging workforce,” says Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute, a research center for aging, retirement and long term care issues. “What’s needed is a portfolio of strategies and solutions that balance the need to retain older workers while also transferring knowledge to younger ones so business performance can be sustained.”
While it’s well known that the senior population is expected to grow, the senior advisor who can deliver affordable long term care coverage to businesses may be able to ride the wave of the future. The Bureau of Labor Statistics reports that between 2004 and 2014 the growth in the percentage of older workers will far outpace that of younger ones. During this period the percentage of individuals in the workforce aged 55 to 64 is expected to grow 42 percent compared to a 5 percent increase in workers aged 45 to 54 and an 8 percent decline in workers aged 35 to 44. At the same time, the percentage of workers who are 65-plus is expected to grow 74 percent. What’s not as widely communicated is that the number of caregivers is not expected to keep pace. An anticipated caregiver shortage will continue to drive long-term care costs as the law of supply-and-demand takes hold while the compound annual-inflation rate grows.
Business owners can provide long term care insurance to all employees or to selected ones. Sole proprietors can usually deduct 100 percent of the maximum eligible premiums paid on their behalf – including premiums paid for spouses and dependents. These are generally fully tax deductible as a reasonable business expenses. Additionally, any qualified long term care expenses not covered by a long term care insurance policy may also be treated as medical expenses and itemized on a tax return.
To help advisors better talk to consumers about long term care needs, one company has developed a new line of print and electronic marketing materials. “As important as planning for long term care is, our findings show that consumers continue to be overwhelmed and confused by the issue,” says Laura Moore, senior vice president of John Hancock Long Term Care Insurance.
“People prefer to research on their own and, once they feel they understand the issues, will sit with an advisor to discuss specifics,” continues Moore. Hancock also offers policyholders and their families free access to an expanding program of discounts, quality ratings, provider reports and advisory services.
“A long term care policy can protect and preserve wealth but it’s only as good as the company behind it,” says Cima. “Having to unwillingly sell assets hurts from a financial and emotional perspective; LTCI can be an important tool to help clients protect their independence and financial security.” ?