Editor’s Note: The following is an excerpt from “How things are shaping up in the LTCI market: a Life Insurance Selling Producer Roundtable, which appears in the November issue of Life Insurance Selling.
To help ease the burden of increasing health care costs at a time when people are living longer, the insurance industry offers a wealth of good long-term care products. And we have a lot of very good people delivering the message about those products to the people who need them. In November’s Producer Roundtable, I talked to three of the more successful producers in the LTCI market about how their business is shaping up this year, and their thoughts on why it has unfolded the way it has for them. Here is what they had to say:
Matthew D. Brotherton, CLTC, president of 1752 Financial Solutions, Richmond, Va.: Going into 2011, I had a pipeline of groups that were ready to move forward in offering LTC insurance. I had been working on these relationships over the past year. The employers realized it was the right time to move forward. They had surveyed their employees to ensure there was interest in pursuing a long-term care insurance program. For many reasons, the employees have purchased the long-term care insurance offered at work. For many, it was the simplified underwriting process, others the additional discounts, and still others liked the simplicity of having it available as a benefit at work. I have focused about 40% of my time continuing to prospect new employers, educating the existing employers — and their employees — and continuing to market the discounted LTCI plans to the state-wide associations I have secured over the years.
Mark S. Jones, LUTCF, president of Remington Insurance Group, Houston: Our year has been better than 2010 for several reasons. First, most of our current client base and qualified prospects are becoming more aware of the long-term care need, fueled by media attention and/or a personal experience with an aging family member or close acquaintance. Almost every baby boomer has a story to share, and the financial commitment for long-term care is generally more than people realize.
Second, the skittish economy and low investment returns over the past several years have caused people to significantly re-evaluate their long-term thinking.
And third, the parents of baby boomers are living much longer than expected, and in many cases, this applies to grandparents as well. It’s no longer unusual to have a 58-year-old prospect discuss their 80-year-old parent now needing some assistance, as well as their 99-year-old grandmother’s monthly expenses at a nearby facility.
Althea S. (“Charlie”) Reed, Ph.D., CLTC, financial representative for Asheville Financial, Asheville, N.C., part of the Northwestern Mutual network, and owner/president of Long-Term Care Insurance Connection: I work in both the individual and group LTC markets, and they couldn’t be more different. The individual market has been flat. Lots of people are very worried about the economy. Spending anything extra, including on things that protect against risk, is difficult for many folks today. At the same time, I am establishing more limited-pay plans than I have in the past — paid at 65 and 10-pay. There are two reasons for this. First, my primary company has just introduced a new limited-pay policy. And second, my primary individual client base is made up of physicians and owners of closely held businesses. They are looking for tax savings, and LTC works well in this market. These clients also like the idea of paying off the policies before they retire. They are worried about retirement, Social Security and Medicare.
The group market is booming for several reasons. First, the CLASS act — concern about introducing LTC before having to respond to the government plan — this is primarily true in voluntary plans. And second, my business model was to market myself, my company and my back-office to other Northwestern Mutual representatives around the United States to be introduced to potential large-group clients. That process really began to bear fruit in 2009, just as the economy was in free fall. In 2009 and 2010, we had lots of conversations with prospects, but almost no new corporate-paid business. This year, we have seen a turnaround. What we are finding is, if you are talking to the right businesses and the correct people in those businesses, they have money to spend and are looking to save tax dollars. The key is talking to businesses and organizations making money and discussing LTC with the people who make the decisions about spending that money.
Charles K. Hirsch, CLU, is a contributing editor to Life Insurance Selling. He conducts the Producer Roundtable features for each issue.