One of the most common objections that a long term care insurance specialist will hear is, “I’ll just self-insure.” This objection can catch even experienced agents off guard — but how can you respond politely to “smoke screens” such as this without letting clients know that you think they are being less than honest?
You can start by offering a few startling facts:
- On average, someone who is 65 years old today will need some form of long term care services for three years.
- Typically, women need care for a longer period of time (on average, 3.7 years) than men (on average, 2.2 years).
- About one-third of today’s 65-year-olds may never need long term care services; however, 20 percent of them will need care for more than five years.
You could also talk about the nearly bankrupt state of the government and how the government will obviously be unable to care for the “silver tsunami” of baby boomers who will need long term care. Medicare skilled nursing facility reimbursements continue to be at risk of cutbacks thanks to huge budget deficits.
What to do when the facts fail
Unfortunately, you can go only so far by offering the facts. You must be careful not to overuse points such as those listed above because many people don’t really want to hear the facts. Their main goal, in fact, is to remain in denial about LTCI by using excuses such as, “I’ll self-insure.”
Unless you recognize “I’ll just self-insure” for what it is — a smokescreen — prospects will be able to effectively stop you in your tracks. After all, it could be very rude to reply that you know they are not that wealthy.
To overcome this objection, you must stick to your firm conviction that LTCI is essential for the welfare of nearly all middle-aged Americans. There’s rarely such thing as being too wealthy to need LTCI.
I sometimes respond to the “self-insure” objection by mentioning that nationally recognized and widely respected advisors such as Suze Orman and Terry Savage own LTCI themselves and are ardent proponents of the product. In fact, they have become wealthy by giving wise financial advice.
Reliable sources tell me that even “super-affluent” people such as Oprah Winfrey and Warren Buffet own LTCI. Although they could easily afford several hundred thousand dollars to pay for their own care, they don’t feel that it’s wise to self-insure. So why should your clients?