Many advisors believe in long term care insurance (LTCI), yet struggle with the complexity of the topic when attempting to discuss it with clients. They often get lost in the details, leaving clients feeling overwhelmed by the number of decisions they’ll need to make.
This is the very reason I recommend advisors not talk about the insurance at all!
The reality is that few planning issues get solved when the topic is approached from the product side of the equation. Take, for example, a client’s need for life insurance. Many successful life insurance advisors will recommend starting with a question, in order to focus your client on what the consequences to their family would be if they should die too young. Similarly, to be successful in dealing with a client’s long-term planning issues, the first step is to help them see the need for LTCI; they must understand the consequences to their family should they ever have an event that brings about the need for long-term care. This is why I recommend not going directly to the subject of the insurance itself when starting the conversation.
Instead, a great question to start the dialogue is, “John and Suzy, when you think of each of your four parents, and each of your eight grandparents, did any of those twelve people reach a point in their life where they could no longer live independently?”
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At first you might think this question is simple, yet it is specifically worded to guide your client’s understanding of LTCI. We want them to not only think of their parents and grandparents but also of their in-laws as well; so be sure to enumerate how many people you are asking them to think of. Our goal at this stage is to redefine their understanding of the words “long-term care insurance,” which typically in their mind is equivalent to “nursing home insurance.” By inserting the words “where they could no longer live independently,” you will properly define the scope of the conversation that will follow.
I have yet to meet a person in the right age demographic for this insurance who hasn’t had an experience of their own that they can relate to when they’re asked this question. Upon hearing it, they’re forced to think about how their family members’ lives ended, and quite naturally, they start talking about that experience.
Now you have the opportunity to dive in to your client’s specific family history with some additional questions. I recommend asking, “How did this experience change the family dynamic? Did it change how your siblings interacted with each other and with your parents?” Then you can delve into other subjects, such as how much this whole episode cost the family. Given all the questions you can ask in order to learn more about your client’s experience, you could easily go on for another 20 minutes.