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Life Health > Life Insurance > Term Insurance

LTCI: Regarding referrals

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Here’s an easy decision. Would you rather generate new long term care insurance business by: A) buying lists and cold-calling strangers who may or may not be qualified for your product and services, or B) meeting with qualified prospects to whom you were referred by someone whose opinion they value?

OK, it’s a silly question. Every advisor prefers landing new clients from referrals, of course, and for many successful advisors, referrals are their only source of new business. But how do you get to the point where you can rely on receiving more than an occasional LTCI referral? We asked several advisors about their experiences and insights for building the referral pipeline.

Cashing in on credibility
Katy Cushman, CLTC is the owner of Cushman Insurance Solutions in Newton, Mass. and Fayetteville, Ark. She estimates that 90 percent of her new LTCI clients come from referrals: 20 percent from existing clients and 70 percent from other professionals.

Cushman’s situation is unique. She built (and still runs) a successful LTCI business in Massachusetts, where she had excellent name recognition and a strong referral network among financial and legal advisors. Her family situation required a move to Arkansas, however, and she found herself starting over from scratch at her new location. “I moved to Fayetteville, Arkansas where nobody knows me and I’m nothing special,” she says. “And so I had to start all over again, just like someone who’s just beginning. It has been entirely a different experience–much harder.”

She began to build a new network of contacts by joining the local Rotary club and Chamber of Commerce. She’s also written newspaper articles on LTCI to build name recognition. Additionally, she’s actively contacting attorneys, accountants and other potential referral sources to introduce herself, but she’s found that many of those professionals don’t welcome the contacts. “So many insurance agents are pounding away at lawyers and CPAs and financial planners,” she says. “A number of people have met with so many insurance agents they just don’t have any desire to do it again. They’ll say, ‘No thank you, I’m not interested,’ which has never happened to me before in my career.”

Cushman continues her efforts to meet with prospective referral sources, but she’s also offering educational seminars to gain exposure and develop contacts. Her seminars aren’t the usual thinly disguised sales pitch–she’s created more technical programs for CPA societies and audiences at senior centers and assisted living facilities. Those presentations aren’t aimed directly at the seniors; instead, she’s focusing on their children who would influence the buying decision or possibly buy the coverage. Her goal is to develop a reputation as a local LTCI expert, and she says that she’s starting to see more referrals from the Fayetteville market. “You need to put yourself out there as an expert, but if nobody knows you, you have to show them that you are an expert,” she says.

Leveraging name recognition
Everyone prefers to deal with recognized experts. That means if you can build a reputation as an expert, you’re likely to get more referrals from clients and other professionals. Bill Upson, CLU, ChFC and president of Strategic Asset Management Group in Walnut Creek, Calif., has been selling LTCI for about 20 years. He estimates that his referrals are split evenly between clients and professionals. Upson demonstrated his LTCI expertise with the 2000 publication of his book, “Long Term Care Alternatives & Solutions.” The book has sold well–it’s available on and through the Million Dollar Round Table, of which Upson is a long-term member. Upson also sends requested copies to friends of his clients, and he believes the book helps drive many of the referrals he receives.

Upson also benefits from his close relationships with CPAs, many of whom are encountering the need for LTCI in their personal lives and with aging clients. Those relationships stem from Upson’s work as a financial advisor, part of which involves the review of clients’ tax returns in a search for tax savings. Upson is not an accountant, so with clients’ permission he would retain local CPAs to review the clients’ returns with him. The alliances he developed with those CPAs are an important source of referrals for him. “As a consequence of doing that, I have become much more conversant with tax returns,” he says. “I have also developed very close relationships with CPAs, who now send me business because they understand what I do and how I cut taxes for clients. Those kinds of relationships are very deep and very rich because they will refer me to businesses, individuals, charities, and groups of people. And as a consequence, I wind up doing group benefits for the CPAs themselves, so I am in their office and seeing them on a frequent basis.”

Nancy Morith, CLU, CASL, LTCP and president of NP Morith Inc. in Princeton, N.J., has also developed a reputation as a LTCI expert. In addition to 20 years of working with LTCI clients–roughly 80 percent of whom are referred by other professionals–she also serves as an adjunct faculty member at The American College in Bryn Mawr, Penn. To generate referrals from existing clients, Morith sends them a newsletter with updates on developments in the long term care market, policy enhancements, and legislation that might affect their coverage. Each issue also offers a policy review and reminds clients that Morith welcomes referrals to clients’ friends and associates.

Morith’s approach to developing professional referrals recognizes that potential referral sources are often being approached by multiple LTCI salespeople. In order to stand out from the crowd, Morith takes the approach of asking what she can do to help the referral source. “So for me that meant doing pro bono work in the beginning to establish the fact that I knew what I was talking about, had great depth of knowledge, and that I wasn’t one of the herd,” she says. “That may perhaps be seeking an opportunity to talk to the local section of the bar association, and if possible, doing programs of educational matter for them.”

It’s important to consider a wider audience for educational programs, Morith believes. She has hosted roundtable discussions at local hospitals and invited senior management, care managers and discharge staff, among others. Although those professionals might not be in the market for LTCI, they can influence patients and patients’ families’ decisions. “If you have created a positive image amongst the care managers, guess whose name will be on their lips when they talk about how the family members in the next generation down should prepare for this themselves with insurance,” she says. “So there is an enormous net that can be spread to the related professionals.”

Client referrals
Existing LTCI clients are another valuable source of referrals. But even your most satisfied clients probably need periodic reminders that you welcome their referrals and are actively seeking them. Charlie Reed, Ph.D., CLTC, and owner of Long-Term Care Insurance Connection, Inc. in Asheville, N.C., has sold LTCI since 1998. She’s developed an innovative method for identifying prospective referrals from clients. After a client starts working with Reed, one of Reed’s staff members conducts an online search to identify boards the client serves on, where they live, etc. Reed uses that information to develop a list of possible prospects that the client knows. She then shows the list to the client, explains that she would like to contact the people listed and asks permission to use the client’s name during the initial contact. Most clients are comfortable with her approach, she’s found. “It’s very rare that clients mind,” she says. “Sometimes they’ll look through the list and say, ‘I don’t think you want to contact that person,’ or ‘I don’t think that person would be interested,’ but typically what they’ll say is ‘Sure, I have no problem with that.’”

Mickey Batsell, CLU, CASL, is the vice president, sales for Individual Commercial Brokerage in Leander, Texas. Batsell, a board member of the Society of Financial Services Professionals, has been selling LTCI exclusively for eight years. He tells clients from the beginning of their work together that the primary way he builds his
business is through referrals from clients. “There are two things I ask of them,” he says. “If the subject of long term care comes up with some of their friends, I say, remember our relationship. The other thing I ask is don’t keep me a secret. I need them to help spread the word and they do.”

Some clients balk at this approach, and in those cases Batsell reminds them that he will be sending them a quarterly newsletter. That helps keep his name in front of clients, and he asks them again to mention his name if the subject of LTCI comes up in their conversations. “I want them to remember me and say, ‘You know what, I know somebody that you can talk to that that I feel comfortable with and I know you’d feel comfortable with him too.’”


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