An important aspect of successfully selling long-term care insurance (LTCI) is to understand why people buy LTCI in the first place. Since the inception of the product, organizations such as LIMRA have conducted research trying to find the answer to that exact question. According to their most recent buyer vs. non-buyer study, the top five reasons that prompted a potential buyer to purchase LTCI were:
- Concern over long-term care (LTC) costs
- Relieve family of care burden
- Planning for retirement
- Loved one required LTC
- Concern about caring for spouse
In looking at these reasons, it is interesting to note that three of the five have to do with concerns about family members. This shows that LTC is an emotional issue and completely intertwined with families. Of course, the fact that LTC is so expensive adds an additional layer of complexity to someone’s thoughts about planning. Combine the emotional aspects of aging and families with money and it makes for a very difficult topic to discuss!
Several carriers have recognized the need to help people have the LTC discussion. For example, Genworth Financial started a “Let’s Talk” campaign to assist family members in bringing up these difficult topics.
In many ways, planning for LTC is similar to estate planning. The primary reason people face these difficult topics is because they care deeply about their family and want them to be taken care of in times of stress and uncertainty.
Discussing consequences rather than risk
An important element of discussing LTC with a client is to focus on the consequences of needing care, rather than arguing over the risk. Like the buyer of life insurance, it is extremely difficult to consider one’s own mortality or need for care, so explaining the risk of LTC can lead to disagreements. Instead, a better approach might be to agree that the chance is small or that it won’t happen to that person.
However, what if it did? This is why a conversation focused on the consequences of an extended care event on a client’s family is the better route.
Long-term care planning, including the purchase of LTCI, can ultimately allow the client to protect their family from the consequences of long-term care. It allows the family members to supervise care instead of provide care. And as the research shows, these kinds of family considerations are very important motivators for potential buyers.
For advisors looking for more training on this approach, I can recommend the CLTC program http://ltc-cltc.com/ . It discusses the advocacy approach to selling LTC.
In addition, the Life and Health Foundation www.lifehappens.org has an “insure your love” campaign that talks about the role family and love play in buying protection products. The organization has several pieces that advisors can use for building awareness.
Tom Riekse Jr., CEBS, ChFC, is managing principal at LTCI Partners, a brokerage general agency specializing in Long-Term Care insurance. Email him at [email protected].