Taking an application for LTCI is often a challenge for even the most experienced and seasoned advisors. After we lead our client down a well-charted path — building the need, asking thought-provoking questions about long-term care, helping the client understand that the product is an appropriate planning tool — we ultimately take an application. Too often advisors stop at that juncture, satisfied to merely put pen to paper. In fact, however, this is not the end, but the beginning of bringing true value to your client and his or her family. It is also the key to more sales for you.
The multi-life sale
Let’s think about this: Your individual client and, if applicable, his or her spouse, sees the value in LTCI. By extension, we should assume that your client would be willing to promote LTCI to family members and colleagues. This means that by going just one step farther, you could unlock the door to a multi-life sale, whether it’s an employer group or simply the client’s own family.
When we look at the need for long-term care, it’s fair to note that roughly 35 percent of care is provided for people under the age of 65. If a child or young adult requires extended care, Mom and Dad could potentially be the people to finance that care for their child. When you look at the premiums for people in their twenties, thirties or forties, long-term care insurance is an attractive option.
Given this, next time you’re meeting with a client, know how many children they have, where they live and their ages. After your clients’ applications are taken, talk about coverage for their children and be prepared to give some examples. In many states, particular insurance companies offer family plans. What a great way to protect your clients and their families, while turning your individual sale into a multi-life sale.
Case in point
Another way many advisors turn individual sales into multi-life sales is through the client’s employer. To illustrate this idea, we can refer to an actual case study that National Long-Term Care Brokers, Ltd. was a part of. Here are the facts: The client and his spouse are ages 61 and 57. The first agent on the case proposed a NYS Partnership, Total Asset 3/6/50 plan ($250/day, 3-Year BP, 5% Compound and 90-day EP); a solid plan design. The annual premium for the plan was roughly $4,300.
The National Long-Term Care Brokers agent went a step further and found out more about the client. It turns out that the client was a chiropractor and a shareholder in a P.C. The agent first suggested that, no matter the plan design, premiums should be paid through the corporation due to the favorable tax-treatment of premiums. After a bit more probing, the agent discovered that there was another shareholder, who was married as well. The primary client introduced the second agent to his partner, who agreed that LTCI made sense. Due to the generous tax-treatment of premiums, the agent also suggested using a 10-pay to fund the premiums. Needless to say, the second agent signed the case, with a total annual 10-pay premium of roughly $18,000. The second agent went one step further and walked away with a multi-life sale, while also delivering true value to his clients.
In today’s marketplace, we need to get a bit more creative. The best way to do this is to leverage your individual sales and client relationships into multi-life sales opportunities. Do your diligence and find out where your client works, if he or she is a business owner or shareholder in a corporation, and the details of the family situation. Don’t be satisfied to simply take an application. Deliver value to your clients by educating them on tax benefits and unique policy options like family plans, and don’t be afraid to make suggestions or recommendations. This is a prime example of working smarter. If you take the extra step, you’ll see a spike in your LTCI sales.
Brian M. Johnson is the director of business development at New York — National Long-Term Care Brokers Ltd. in Clifton Park, NY. He can be reached at email@example.com or 518-371-5522, ext. 154.
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