How do you get them to buy what they know they ought to buy? A perennial concern.


The following is a reformatted version of an article that appeared in National Underwriter Life & Health print magazine Dec. 7, 1998.

Washington

“Seminar selling may not be your thing, but for me, it’s the best way to sell long-term care insurance,” said David Miller in a workshop here at the First National Forum on Long Term Care, sponsored by G. J. Luque & Company, Inc., Fairfield, Conn.

The director of LTC at David M. Briggs & Associates, Dalton, Ohio, Mr. Miller was one of many LTC producers at the conference who told how they broke into LTC sales and made a career of it, even though LTC did not gain public awareness until the 1990s.

All the speakers gave tips about LTC marketing gleaned from their own experience. The ideas varied, and sometimes differed, but one point came through repeatedly: It’s mission critical for the industry to educate both producers and clients about LTC needs, possibilities and coverages.

Mr. Miller said his own LTC business took off after he started selling the coverage via seminars. In the mid-1980s, he recalled, he entered the insurance business by selling mostly Medicare supplement policies. That was a time when LTC was still known as “nursing home insurance,” he said.

His first sales method was direct mail-but those were the “starvation years,” Mr. Miller quipped. Then he turned to seminar sales, using an approach that emphasizes educating the customer, and business picked up.

First, “I got educated,” he explained. “You see, I found I had the nursing home mentality, too” (i.e., the belief that LTC insurance was only for paying nursing home expenses). But after he attended a class about LTC seminar selling (led by Phyllis Shelton, president of LTC Consultants, Nashville, Tenn.), that changed.

In fact, he decided “to become the LTC expert in our area,” he said, and to establish relationships with the centers of influence (attorneys, accountants, etc.) to make it work.

The change was “almost unbelievable,” he recalled. He made “two sales, right off the bat,” following his first seminar.

John Ferroni, a LTC specialist at New Age Financial Services, New York City, and co-leader of the workshop, also found his niche through LTC seminar selling.

He started out as a debit agent in the 1980s, he recalled, but “hated it” and subsequently left to form his own agency. He sold many products, “but I couldn’t sell the LTC,” he said. So, like Mr. Miller, he decided to take Ms. Shelton’s class on LTC and seminar selling.

Within one month, “my closing ratio went from zero to over 80 percent,” he recounted. Why? “I learned how to pre-qualify” prospects from the seminars, he said, “and I started selling the policies correctly.”

The seminars seem “like a perfect fit,” Mr. Miller said, because they allow producers to be “very educational,” and “to have a conclusion that draws people to fill out a questionnaire, to make an appointment.”

But “first,” Mr. Miller added, “you have to educate yourself. This shows the client that you took the time to learn and do the research.” Educating the buyer comes next.

Said Mr. Ferroni: “My selling went way up. I wasn’t afraid of the premium (cost) anymore. I educated the people at the seminar on the need, and I didn’t care if I didn’t get the sale on the first day.

“I found that, in the seminars, you can do 20 interviews at one time. Then, later on, you can talk to one or two of the people in their homes, where you go through it again.” This approach, he said, leads to sales.

LTC insurance is not for everyone, Mr. Miller said, noting he tells this to his seminar audiences.

He also tells the audiences that, if they supply certain information (health, assets, etc.) on the questionnaire he hands out, this helps make it so “I won’t waste your time if LTC is not for you.” This is how he obtains the information he needs to pre-qualify the prospects.

People do open up to this approach, he said.

“Education, education, education-those are the three most important things to do in selling LTC insurance,” he said. The seminar format allows this to happen, he stressed.

That’s true with Internet selling of LTC as well, according to George A. Mellendorf, of ltc solutions, inc., Port Huron, Mich., who led a workshop on Internet distribution.

Visitors to his firm’s retail website (www.ltcsolutions.net) are “generally surfing for information,” while agents who visit the firm’s broker website generally “are looking for product and support,” he said.

The retail site provides general information about LTC, what to look for in a LTC policy, and related matters. Those who are interested can fill out a form requesting more information (name, address, e-mail, date of birth, medication use, and whether the person is “just looking” or wants to purchase within the next 30 days).

“We get better than 120 to 130 leads a month this way,” Mr. Mellendorf said. By contrast, the firm connects with five to six LTC brokers a month, from the broker site.

“The people to whom we are selling LTC are using the Net,” he added. “They are college educated and affluent.” And, if they are baby boomers, “they don’t care much about relationships with businesses, in the way their parents did….They have a `deal’ mentality, looking for a better product and price.”

Therefore, Mr. Mellendorf said, “don’t put too much fancy stuff of your website. You want your page to pop up right away. Remember, you’re selling information, not Lexuses.”

Do website visitors give information back to the firm? “It’s amazing, unbelievable, the kind of information people give us over the Net,” he said.

Mr. Mellendorf said his firm started the website as an experiment. But it is no longer that. And, starting in 1999, “if people don’t have an e-mail address, I won’t do business with them,” he said. “I’m done with using the post office.”

In the opinion of Edward J. Rich, marketing director of LTC at M&O Marketing, Dearborn, Mich., education is one of the “four quadrants of LTC sales.” (The others are field training, recruitment, and fulfillment.)

People in the next millenium will have growing need for care, he indicated, citing articles published lately on emerging LTC needs. “We’ll miss the boat, if we’re not preparing for it.

“In fact, I think we should make LTC the first thing new agents get into, not life insurance or annuities.”

As for training, Mr. Rich said “new agents need to have an experienced person go in the car with them, someone who can show them what to do. At our firm, we find dynamite LTC/annuity specialists to do this.”

Some other pointers:

  • Consider prefunding a client’s LTC policy with a single premium immediate annuity, written as a life with period certain plan, suggested Dallas Powell, of Dallas Powell and Associates, Inc., Longmont, Colo. Set up the SPIA so the payments cover all or most of the LTC premium, he said. To fund the SPIA, ask if the client has IRAs, life policies, or other sources of qualified money that’s not needed for other purposes, he added. Then move that money into the SPIA, via a 1035 exchange, he suggested.
  • LTC specialist firms shouldn’t be run as mom-and-pop operations, said John Haslett, president of the Haslett Management Group, Inc., Reston, Va. Instead, develop a business plan and review it annually, he suggested, explaining that “we’re business owners, and we need to think like big business in order to achieve our goals.” Remember, he added, LTC firms “have a long-term value. The business stays on the books from 17 to 20 years, so think in terms of buy-sell agreements and agency liquidation” as well as day-to-day operations.
  • “The affinity/worksite marketplace will be the growth area for LTC sales in the next few years,” predicted Kim Purnell, LTC specialist in Palm Bay, Fla., adding that “people in their 40s and 50s are a perfect market” for this coverage.
  • To build up business, producers should develop relationships with senior organizations, promote and organize senior health expos, make contact with local independent living and assisted living communities, and take similar steps, Mr. Purnell said. Telemarketing and lead generation programs can also help. The goal: “Build a database from referrals and networking,” he said.
  • LTC is “like a foreign language” to some producers, said Catherine Dove, LTC brokerage director, The Producers Group, Irvine, Calif. So LTC shops should make things “very simple for producers,” she said. For example, use bullet-point sheets, she suggested. Also: highlight important features; go over how to fill out the application correctly; and use a signature checklist (to help assure that the forms come in signed).

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 7, 1998. Copyright (C) 1998 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.