The long-term care insurance (LTCi) market has experienced a year of change. Carriers have pulled out of the market; the ones that remain are revising the traditional coverage to a more flexible plan after finding the cost of care to be too steep. Meanwhile, benefits are being revised and premiums have increased.
LTCi is not an easy sell. It can be expensive and difficult to qualify for, and it can be a hard conversation to have with clients who aren’t ready to consider that they could eventually need LTC.
Despite these hurdles, LTC insurance has never been more important. It can help save your clients’ retirement. It can help save families a lot of stress and hardship. That is what is important. We don’t look at these changes as a reason to stop talking to your clients about LTC. We look at them as the reason you should help them explore all their options when it comes to funding their long-term care risk. It’s up to you, the agent, to help them find the plan that is right for their family and their budget.
This blog series will explore the different options available to your clients, including traditional LTCi, linked benefit products, short-term care and stand-alone home health care. Each blog post will lay out details about each option so you are armed with the knowledge of when to use which one.
By definition, traditional long-term care is a stand-alone product that will cover the insured if an LTC event occurs. The amount of coverage available is determined when the policy is purchased. The amount of underwriting required depends on the client’s health.
+ Versatility in plan design options
+ Option to include a Cost of Living Adjustment (COLA) rider to the policy
+ Experience of processing claims is greater with a traditional LTC carrier (they have been around a lot longer than other options currently offered)
+ Tax benefits
- Only way to receive benefits is to have a specific LTC event occur
- Viewed by clients as a "waste of money" since most clients do not want to consider that they will need LTC services
- Difficult to determine how much coverage client will need
- Premiums are expensive and rates are likely to increase
Moses and Jackie have been married for 57 years. They have a modest income and have been independent all their lives. They don’t want to become dependent upon any family members if a need should arise. They have raised their children and don’t want to become a burden on them. Jackie was a caregiver to her mother and has firsthand experience on how this impacts her physically and mentally. Not only was it an impact to her but on her marriage too. Jackie does not want any of her children to go through what she went through while caring for her mother. They have a traditional comprehensive LTC policy. The first question they answered was: would you rather write a check for $170.00 per month now or would you rather write a check for $6,000.00 a month later if a need arises?
So how do you sell it? LTCi is an emotional sale, so for the prospect to truly feel the need, you have to tie the need to their emotions. No matter what product you are talking about, LTC is about preparing and planning for the future and saving your loved ones the burden of expensive LTC costs.
Here are three tips for helping diffuse objections before they arise and keeping LTCi prospects from remaining undecided.
1. Start as an educator, not a salesman. If you come right out of the gate talking about solutions and product features, you’re telling the client that you’re a salesman and they’re a buyer. Their first reaction will be to pull back, to resist, because the last thing we want to do is be sold something we don’t want. So you have position yourself as an educator first and let them sell the product to themselves.
2. Have the client talk about their own experiences with long-term care. Did their grandparents or parents need care at the end of their lives? How did that affect them? If they’ve agreed to see you and talk about long-term care, chances are something happened in their past to trigger their interest. Find out what it is and build on it.
3. Dig deeper with probing questions. “What will happen to you and your family if you should need long-term care and you don’t have any insurance?” Questions like this force the client to really consider what a long-term care situation would do to their spouse or their children. Get them to visualize their aging spouse, forced to take care of them; or a son putting his career on hold to move home and be closer to a sick parent.
If you can get a prospect to this point, you’ve gotten them to a place where they can possibly sell the product to themselves. You’re simply the facilitator, the educator, the closer. Don’t forget that part. You have to be the one to close, to take them from the point of actually understanding they need something and putting the right solution in their hands.
Genworth — Privilege Choice Flex 3 Enhanced
Mutual of Omaha — Mutual Care Solutions
National Guardian LTC
Transamerica — TransCare III