Jesse Slome has been talking at events and interviews about coming up with a new paradigm for long-term care insurance (LTCi) and long-term care (LTC) planning.
Last week, we published the first part of a presentation he gave recently at the National LTC Insurance Summit. There, he talked about the need to move to a New & Improved LTCI strategy.
Here, he talks about what that strategy might look like.
Welcome to the world of New & Improved Long-Term Care Insurance.
In the old world, the world of the Hummer, we used a “one and done” approach. Now we have to move toward a more flexible, layered approach that might start when consumers are in their 40s or 50s and evolve over the years.
Let me compare “old think” ideas with “new think” ideas.
Old think: Inflation protection is mandatory.
Okay, I can feel the hairs on the back of many of your necks rising. I’m touching the third rail of LTCi: Inflation protection.
Inflation protection was always an option. It certainly served a purpose and provided a value. But it was … and is … an option for those who can and will pay for it. It just was not sold that way.
New think: Some coverage, even if it doesn’t grow, is always going to be better than no coverage.
People understand that some money saved in a 401(k) is always better than no money in a 401(k). People understand that some health insurance, even if that means having a high deductible, is always better than no health insurance.
People always find ways to manage their benefits. In the new economy, we are all getting even better at managing our benefits.
Long-term care insurance is no different.
If doubt still lingers: Ask any claims department person, and they’ll tell you that no beneficiary or family member ever complains about getting $100 towards the cost of care, even if the cost of care is $200. Some agents call it a $100 coupon towards the cost of care.
So, with New & Improved LTCi, inflation growth will once again be an option. That will be your “up sell” for those who want it.
Old think: Insure the full risk. Insure the most costly risk. Base everything on nursing home costs.
New think: Co-insure the risk.
This is now “nursing home avoidance” insurance, because what you want today and what you’ll want tomorrow is to avoid going to a nursing home.
Ask home care experts how people use their long-term care insurance benefits: A few hours a day, a few days a week. I love their term: “Wake-up and tuck-in service.”
With New & Improved long-term care insurance, some benefit is always going to be better than none.
Many of you have experience with clients with I call “catastrophic needs,” and I am not ignoring the data we publish in the American Association for Long-Term Care Insurance (AALTCI) Sourcebook that reveals the largest claims. A few claims are big. They are long. They are costly. But they are also the exception and not the rule.
Here’s what we know for certain: Long-term care insurance premiums will not be decreasing in the years ahead.
Cost (or high cost) is the number 1 objection people raise. The perception of high cost keeps many from looking into LTC planning. It keeps many from buying.
To get people to look at something for the first time, and to get others to relook, to reconsider something, “New & Improved” can achieve powerful results.
I believe it is an approach that will effectively resonate with prospects, and convert prospects into buyers.
I believe that we as an industry need to rebrand.
I believe that if you want to be a Prius dealer, and not a Hummer dealer, New & Improved LTCi is your ticket to success.