If you’ve been living and breathing long-term care (LTC) planning for years, you may have mixed feelings about newcomers.
On the other hand: You may feel as if generating genuine live leads and making sales is already hard enough.
On the third hand: It might be easier to convert leads in a brutal but lively market than in a dead LTC solutions mall. Tumbleweeds fill out no applications.
Lincoln Financial, a company active in the market for life-based LTC financing tools, has put its muscle behind making the market livelier by releasing a financial advisor survey report in time for this November’s Long-Term Care Awareness Month campaign. A research firm polled 373 full-time financial advisors with five or more years of experience. The participate in the survey, an advisor had to have at least some familiarity with LTC planning tools, but most were not LTC planning specialists. The participating advisors said they’re selling an average of fewer than five LTC planning policies per year.
Andrew Bucklee, head of insurance solutions distribution at the Lincoln Financial’s Lincoln Financial Distributors unit, said his company wants to help more advisors have serious conversations with clients about LTC planning.
He said he has reasons of his own for wanting to see more advisors interest in the topic. About 90 percent are willing to talk about LTC planning, but only about 10 percent have actually set up LTC planning solutions, he said.
“I have a mother in a nursing home, so I have a lot of passion around this,” Bucklee said.
Bucklee told the story of another top LTC planning advocate who became aware of the need after her own family spent $600,000 on LTC services.
“It’s situations like that where advisors get religion,” Bucklee said.
Even if advisors are not interested in offering LTC solutions themselves, at least they can learn enough to know when and how to refer clients to LTC planning specialists, he said.
For a look at five things Lincoln Financial learned from its survey about how the general advisor population sees LTC planning, read on.
1. Advisors who aren’t LTC specialists see demand for LTC services growing.
About 90 percent of the advisors in the Lincoln Financial survey said they expect demand for LTC services to increase slightly or significantly over the next five years.
Only about 2 percent said they expect demand for LTC services to decrease.
2. Non-LTC specialist advisors may be more aware of stand-alone LTCI than they are of other LTC planning tools.
Insurers have worried for years about consumers’ lack of awareness of stand-alone LTCI products.
The Lincoln survey team may have discovered a related problem among advisors: lack of advisor awareness or interest in planning tools other than stand-alone LTCI.
When the team asked advisors about the tools they and their clients consider for LTC planning purposes, 88 percent mentioned traditional LTCI products.
Only 61 percent said they think about life insurance products with LTC-related features, and just 57 percent said they consider annuities with LTC riders.
Fewer than 40 percent think about a client’s home equity or Medicare, even though Medicare pays for a significant amount of skilled nursing facility care and home health care.
3. Advisors from outside your turf aren’t necessarily that aware of what LTC services cost.
You may skim enough insurer-sponsored LTC cost surveys every year to have the daily rate for a private nursing home room in Alaska memorized, but many advisors that are not LTC specialists are about as lost as the clients are.
The U.S. Department of Health and Human Services (HHS) reported in 2010 that, five years ago, the national average cost for a private room in a nursing home was $83,580 per year.
About 12 percent of the advisors in the Lincoln survey said they thought they average was less than $50,000 per year.
See also: How much does care cost?!?!
4. For advisors outside LTC planning, the biggest barriers to getting in are product costs, and worries about product price stability.
The consumers Lincoln polled were about equally likely to complain about the current cost of LTC products and the potential for future increases: 64 percent named current costs as a primary barrier to choosing an LTC solution, and 62 percent cited the potential for future increases as a primary barrier.
Among non-LTC specialist advisors, about 53 percent named the potential for future increases as a primary barrier, and 73 percent cited the current cost of LTC products as a primary barrier.
5. Other advisors recognize that you have a tricky job.
When Lincoln asked non-LTC specialists about the most difficult risks to manage in a client’s retirement income plan, just 33 percent listed inflation. Forty-six percent talked about market volatility.
Sixty-eight percent named health care costs as one of the most critical retirement planning challenges, and 61 percent cited LTC costs.