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Generating LTCI referrals

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If your long term care insurance seminars and other marketing techniques aren’t generating as much business as you’d like, it may be time to focus more on getting referrals from accountants, financial planners and other insurance producers. Jesse Slome, executive director of the American Association for Long-Term Care Insurance in Westlake Village, Calif., says that the association’s surveys of its members illustrate the importance of referrals. “Roughly two-thirds of those who rank among the more successful long term care insurance producers are getting anywhere from about one-third to two-thirds of their prospects directly from referrals,” he says. Making Contact No one would argue that referrals from other professionals provide a great entr?? 1/2 e to qualified prospects. But just how do you get onto the short list of recommended LTCI producers? Slome says the most successful method he knows for approaching accountants is to call (outside of tax season) and ask for five minutes on the phone. During the call, try to determine if the accountant understands how LTCI works, the tax deductibility rule, and whether he recommends it to clients and already works with other sellers. If the responses are favorable, request a brief face-to-face meeting to introduce yourself and your work.
That approach works for Jay Zandell, owner of the Z-Planning Group in Phoenix, Ariz., who gets almost all of his new business via referrals from financial professionals. “I happen to have a lot of confidence in my abilities and what I do,” he says. ?? 1/2 So, in that capacity I have no problem whatsoever picking up the phone and attempting to establish a meeting.?? 1/2
Professional associations also provide opportunities to network and develop relationships with prospective referral sources. Zandell participates actively with the Financial Planning Association and National Association of Personal Financial Advisors in his area. Nicole Gurley, owner of Gurley Long-term Care Insurance in Scottsdale, Ariz., follows a similar tack: She is president-elect for 2008 of the Financial Planning Association of Greater Phoenix.
Accountants and financial planners must earn continuing education (CE), and Slome says many of his members have used that requirement to get themselves in front of those professionals. The producers interviewed for this article agreed that a well-designed and informative CE presentation on some aspect of LTCI that interests the audience helps build credibility among audience members. Hitting the Sweet Spot Assuming you can get in front of your targeted referral sources, what will they want from you to justify a recommendation to their clients? Referral sources share some characteristics. For example, Slome says they don’t want to jeopardize their relationship by telling the client to apply for LTCI only to have the application rated or rejected.
That concern creates an opportunity for producers who work with multiple carriers and understand how those insurers underwrite applications and price policies. Knowing which insurer is most likely to give the applicant what he?? 1/2 s seeking benefits both the applicant and the other adviser. “You’re able to say, listen, I can make the process smooth, easy and successful for you and your client,” says Slome. “Meaning, I will be able to explain which difficult health questions we have to ask. And, I will be able to assure them that they’re more likely to get accepted and avoid being rejected or being rated for their insurance coverage.”
Natalie Murch, owner of LTC Choices in Blacklick, Ohio, estimates that 90 percent of her referrals come from other financial advisors. She believes that being able to offer multiple LTCI products from multiple insurers is important in developing and sustaining referral relationships. “I think it’s very difficult to be a good resource if you only have access to one carrier,” she says. “None of them are right for every situation. So I think a mistake would be to put all your eggs in one basket or only have one company to offer in terms of solutions. You could take that one step further and say you even need to have multiple types of products. [You should have] traditional long term care, life and long term care combos, annuity and long term care combo products so that you can be flexible and look at all of the options for any given client.”
Murch works with numerous licensed agents who could sell LTCI if they wanted to, but they often refer cases to her on a commission-sharing basis. That arrangement provides several benefits. First, it allows the agent to play as little or as much of a role as desired during the LTCI sale. Second, it keeps the agent in the loop for policy service, which helps with client retention. Finally, it generates income for the referring agent with relatively less work than making an individual sale.
Working with other agents?? 1/2 clients requires diplomacy, however, says Murch. “It’s important to keep in mind that the person who refers you to the client controls the relationship,” she says. “I think one blunder would be to step on that person’s toes, whether it’s trying to take too much control of the process or, more importantly, not keeping that person in the loop.” Avoiding Difficult Questions At the risk of oversimplifying, most accountants work on taxes and business consulting while financial planners create plans and manage investments. These professionals aren’t required to delve into health-related questions with clients like their LTCI counterparts. While they probably have a general sense of their clients?? 1/2 health, they probably lack detailed information.
In contrast, LTCI producers ask these questions routinely. The ability to complete a policy application with some degree of sensitivity is a skill that other professionals can come to value. “For other financial professionals, the key is that the long term care sale is a relatively uncomfortable sale for them,” says Slome. “They’re not used to asking health questions. You?? 1/2 re willing to take on the difficult questions with their clients so that they don’t have to feel that level of embarrassment.” Expanding the Relationship The goal of the initial and subsequent contacts is not to sell, Zandell says. In fact, an attempted hard sell of your services as a resource for the other professional probably will backfire. “Focus your business on planning,” he says. “If you focus on planning and you understand the other advisors?? 1/2 world and their process and you can integrate your business into what they do, you have a much better chance of success with an opportunity with that planner. Take, for example, the fee-only planner who does nothing on the insurance side anyway. They want to know that you understand what it is they’re doing and their focus on planning before they’re ever going to refer a client to you.”