Notes:

Not only is the senior market growing in size, but Americans are living longer than ever, increasing the likelihood that they will need long term care within their lifetime.

Instead of looking at 50-80 year olds, insurers are honing in on the 40-50 market, the 50-55 market, and so on. Meanwhile, some media have criticized the industrys eagerness to sell to these younger markets, saying it is unnecessary for people of such a young age to have this coverage.

That is the heart of todays LTC insurance debate: What is the "magic number?" That is, what is the age at which people should purchase LTC insurance in order to benefit from lower premiums and obtain coverage before they need the care?

In truth, there is no magic number. But insurers that go after the younger market alone are missing out on a huge opportunity.

Younger adults still feel bulletproof and say they will always feel young, making it less likely they will be thinking about ways to protect their finances. But, statistics show that seniors over 65 years of age are thinking more about their mortality and whether they will outlive their assets, making it more likely they are worrying about how to finance their retirement years.

The sales approach used for the over-65 market is slightly different than that for 40-50 year olds.

The senior market needs information on LTC insurance. Many in this market are not familiar with the statistics. They may not be aware that at least 40% of the senior population will risk entering a nursing home within their lifetime, or that the average cost of care in a nursing home is more that $52,000 annually, according to Health Insurance Association of America information.

In view of those figures, it is important that agents educate their senior clients on the risks the clients face if they do not have the appropriate coverage. Once clients become aware, the agent has made a terrific inroad to talking about solutions and even specific options that most suit the need.

It is also important for agents to build trust with senior clients. Finding out what concerns them the mostwhether it is outliving their assets or being able to afford care in a nursing homeis the first step in building this solid relationship. The senior market, more than other markets, must have faith in the agent. The clients must feel that the agent is giving them the right products and has their best interests at heart.

Older clients also want to be reassured that the company they are investing with has the expertise necessary to meet the needs of people like them.

For agents, that means they must talk to their senior clients about the number of years the company has been selling LTC insurance. They should also discuss the amount of LTC insurance the company has in force, the number of times the company has had a LTC insurance rate increase, the number of states in which the company is selling LTC policies and the companys independent agency ratings.

Additionally, agents in this market will need to overcome the common misconception that LTC insurance is too expensive. They might approach this by explaining that the cost of an LTC policy is downright cheap compared to actual costs of the care they may need down the road. For example, according to the Federal Long Term Care Insurance Program, by the year 2030, the national annual cost of a semi-private room in a nursing home will be $190,600, costs for an assisted living facility will be $109,300 and home care costs will climb to $68,000.

While baby boomers are quickly approaching their golden years, people over age 65 still are looking for answers and ways to best prepare themselves for their financial futures. It is important to continue to tap into this market and educate seniors about what they will need to enjoy their retirement years.

is branch sales manager of Bankers Life and Casualty Companys Little Rock, Arkansas, office.

Reproduced from National Underwriter Edition, April 16, 2004. Copyright 2004 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.