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The image of financially secure seniors whose biggest concern is their next vacation is losing ground to one of seniors who can’t sleep at night because of worry about the cost of health care. “Who’s going to take care of me when I no longer can?” is the question that arises with increasing regularity in the minds of most seniors.

The statistics as to how many of us will need long term care — assistance with the basic tasks of daily living — are overwhelming. Any retirement plan is incomplete unless this is addressed because the future of each senior’s health is unknown. Presenting the only solution that can fill this gap, long term care insurance policies become more comprehensive each year. But how do you make prospects aware of this?

“To sell long term care insurance, you’ve got to come in through the back door,” says Michael Radler, CLU, with Mercury Wealth Management in Avon, Conn. Radler, who has sold LTCI for over 10 years with a very high closing ratio, avoids mailings, seminars and other forms of mass promotion. “Those are generally low pay-off methods. Take an informative, educational approach in a one-to-one setting. Talk about issues of concern. Ask your client if he knows anyone who’s needed care. The discussion usually takes on a life of its own at that point.”

It’s easy to see how health care can become the leading concern of even the most self-sufficient of seniors, ultimately curtailing their independence and possibly bankrupting them in the process. This is because the rising cost of health care is inseparable from greater life expectancies.

“The aging of the workforce, the shift of health care costs to employees, and the government attention and publicity long term care has received have contributed to the favorable spotlight long term care insurance is now in,” says Mike Simonds, chief marketing officer for Unum US.

Talk it up
“When making it part of an individual’s or couple’s financial plan, long term care is an easy topic to broach,” says Angela O’Neill, a financial planner with the Strebel Planning Group in Ithaca, N.Y. “Clients want to control their financial destinies as best they can and want appropriate care.” O’Neill does no outbound marketing. Instead she relies on face-to-face client meetings where she mentions concrete reasons to consider coverage. “People are more willing to discuss their concerns in a private setting,” she says. “But most of them do not look out this far. Their goal may be to avoid a nursing home. They need to know LTCI can make this possible.”

O’Neill, who says she’s passionate about LTCI, regularly brings up the subject to clients in their 40s. “At this age they’re generally open to it. They’ve usually seen what’s happened to older family members but are reluctant to take on what they perceive to be another expense.” To leap this hurdle, O’Neill relies on illustrations which point out the cost of waiting. Using what she describes as “conservative numbers,” O’Neill removes emotion from the equation and lets clients consider the long-term consequences of inaction.

O’Neill notes senior advisors need to focus on their client’s long-term horizon. Most seniors understandably want to avoid nursing-home living and want to protect what they’ve earned for themselves and their families.
For those seniors who may wish to shoulder the burden themselves, a long term care policy can be a wise investment, since despite the best planning, the possibility of a long-term illness remains one of the greatest risks to one’s financial future.

“Showing our current clients the likelihood for the need for LTCI has served us well,” says Phillip S. Smith. Smith, an advisor with Market Street Advisors in Wilmington, N.C., adds “LTCI can be sold as a form of ‘nest egg protection’ because some 50 percent of all people entering a care situation are penniless within one year.” Smith networks with other advisors in his firm to present a case for long term care coverage. He also has a lively referral end to his practice which focuses on serving seniors.

What, me worry?
In spite of little planning, 84 percent of retirees surveyed in Wachovia’s fourth annual Retirement Survey characterize themselves as “not distressed” when asked about their retirement finances. Among younger retirees between 55-59 with less than $250,000 in assets, 75 percent describe themselves as “not distressed.”

“Many things conspire to make recent retirees content with their financial prospects for their golden years,” notes professor Thomas Gilovich, chairman of the Cornell University psychology department, who reviewed the study. “There is a general human tendency to discount the future and focus on the here and now, especially if the future may involve physical decline or isolation. As people age, they become very good at looking on the bright side and derive satisfaction with what comes one’s way. Unfortunately, the early retirement years are often a time for unwarranted and potentially deleterious optimism.”

Health care costs rank among Americans’ top personal economic problems, according to a Kaiser Family Foundation poll. Struggling with such costs has impacted the financial well-being and family health care choices for nearly three of every 10 Americans; 28 percent report they or their families have had a serious problem paying for health care as a result of recent changes in the economy.

“One of the most common objections we hear is, ‘We have enough money if that should happen,’ or ‘Doesn’t Medicare or Medicaid do that?’ says Smith, who affectionately refers to this phenomenon as “Medicaid estate planning.” Another common objection: “I’m too young for that.”

Smith uses facts to make his case and avoids emotional sways. “The need for care can last years and be financially devastating,” Smith says. “Long term care insurance can help lessen risk, protect assets and keep goals on the horizon.”

Many advisors succeeding with long term care insurance are partnering with referral sources that have access to clients and established relationships. “The best partners are accountants, financial planners, estate planning attorneys and insurance agents who specialize in health products,” says Jesse Slome, executive director of the American Association for Long-Term Care Insurance. “Advisors who don’t specialize in long term care insurance may exponentially increase their effectiveness by partnering with a local specialist until they are conversant in presenting and closing sales. Those not willing to set aside their egos or share in compensation will stumble in their sales efforts.”

And a job well done can lead to referrals. People readily share information with friends, neighbors and co-workers. A stellar track record can win key referrals and lead to new business. But no advisor can wait for people to start talking about them, so it can pay to ask for a referral.

You can “create” referrals with a simple, honest approach. Try telling a satisfied client: “I’m trying to grow my business and would appreciate if you can provide me with one or two leads.” Or: “Since you’re happy with our service would you know anyone else we might be able to help?” If they provide you with a name or two, quickly get in touch with the prospect. If you have to leave a message be sure to mention who referred you. If you’re using e-mail don’t be shy about adding the referrer to the “cc” list.” This adds to your integrity and shows you’re confident and serious about speaking with the prospect. As this is new business you’re trying to cultivate don’t be clever, cute or overly friendly. A brief but factual message is usually a good basic strategy:

“Mr. Jones, Sam Sample of XYZ Inc., suggested I contact you regarding long term care insurance. We’ve been providing Sam with first-rate long term care coverage from a top-rated carrier for five years. If you have a few moments in the near future, I’d like to show what we can do. I hope we can meet soon.” you’ve sent the e-mail or voicemail be prepared to continue. No one knows how much business is lost by those who make a strong presentation but fail to follow up. “An advisor who follows up is demonstrating his seriousness about the prospect’s business,” notes Smith. “This helps form an impression that you’ll do a good job.”

About eight million Americans have long-term care insurance. Some 400,000 new policies were bought in 2007 according to the American Association for Long-Term Care Insurance’s 2008 Sourcebook. While a lot of seniors are getting the message, there’s still more ground to cover.


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