The mainstream personal finance media frequently approach the LTCI-buying decision from a wealth perspective. Prospective insureds with limited assets don’t need the coverage because they’ll qualify for Medicaid while the affluent can pay for care from cash flow and asset sales. Consequently, only the middle class–the so-called mass affluent–need LTCI. Larry Feldman, CLU, with CFK Life Plans Inc., an affiliate of ICA/ICB in Latham, N.Y., says that logic is faulty. In his presentation, Feldman will share his insights for marketing LTCI to the affluent; here’s a first-person preview of his message.
Don’t overlook the affluent prospect
“I want to spread the word that high-end or affluent clients are definitely good prospects,” Feldman says. “There are reasons why they own long term care insurance and they shouldn’t be neglected or overlooked in the marketplace. Many of these people believed, ‘I’ll self-insure because my attorney or accountant told me to self-insure.’ A lot of those people may have felt that was good advice a year or two ago. But in seeing their portfolios losing as much value as they have, they may want to take a different look and take a different strategy now. As financial advisors in the marketplace, you want to go where the money is because times are tough and prospecting is a little bit tougher than it was a year or two ago. You need to open your eyes that you have greater prospecting opportunities than you were thinking in the past.”
Illustrate the true costs
“In my area of Upstate New York, it costs $100,000 for a year in a LTC facility,” Feldman adds. “The affluent prospect has probably been told, ‘Well, you’ve got a million dollars. You can afford $100,000.’ But that’s not the true cost of taking out $100,000 from your assets. You’ve got taxes to pay, whether they’re income or capital gains. And so people don’t realize they’re going to chew up their asset base a lot quicker because it’s more than just the cost of care: You’ve got to pay the piper for liquidating.
When you put the figures in front of a prospect in a mathematical way, most people would come to the conclusion it doesn’t make sense to self-insure when they look at the numbers. I then share a one-minute sales presentation with the ideal high-end client–it’s something that I created and then copyrighted–which 80 percent of the time elicits the ‘wow’ factor, even from accountants. The presentation consists of seven bullet points illustrated graphically and when I get to the seventh bullet point, the reaction is often, ‘Wow! I can do that?’”
Register today for Senior Market Advisor Expo 2009 and don’t miss Larry Feldman’s session, “Use LTCI to Bring in High-Net-Worth Clients,” at 11:30 a.m.-12:30 p.m., Tuesday, Aug. 25!