Selling Long-Term Care Insurance
Long-term care insurance allows you to use the fundamental selling skills that you have developed with other financial products to address another need of the customer. In most cases, only minor modifications of these skills will be required for you to sell long-term care insurance. However, looking into insurance continuing education on the topic is always a good idea.
Minimum and Maximum Ages
Most literature from carriers that provide long-term care insurance products suggests that the individual long-term care market "begins at 40." Generally speaking, consumers will not become motivated to consider their long-term care needs until their early 40s. Why?
Well, several things are happening in their lives. They just got their first pair of bifocals, and the optometrist explained that, "it's just something that happens to your eyes when you get older." Someone at the office who is about the same age recently had a heart attack. And the doctor wasn't happy with their triglyceride count during the last physical. The kids are in college or about to start, and that comfortable nest egg doesn't look so comfortable anymore. The health and care of their aging parents are increasingly on their minds.
Perhaps most important of all, they begin to feel the death-grip of age take root in their own bodies. In the sanctuary of secret thought, they begin to confront the inevitability of their own mortality. The maximum issue age varies by insurer. The most common maximum ages in more recent policies are 79 and 84. Of course, the coverage becomes more expensive at the higher ages.
So, with such a large market, where do you begin? First, recognize that this group is not your traditional life insurance clientele. Your 20- to 39-year-old life clients will eventually become long-term care prospects, but they generally are not the place to start in bridging into the long-term care business. Too many agents have made this mistake.
So, we need a fresh way to generate prospects among the 50–64 age group. There are several approaches we could use.
- Your natural market: social systems and subcultures you belong to in a community
- Seminars: Host a seminar to get the message across to a large group at once; consider inviting a health expert to add credibility
- Referred leads: Ask for leads from satisfied customers
- Advertising: Advertise in community, TV, radio, online
Important Note: However you prospect for long-term care clients, be sure to be diligent in following any applicable policies and procedures of your company. And, above all, be ethical.
Once you have identified possible long-term care insurance prospects, you must qualify them for your services. The questions here are the same as for any other insurance market:
- Does the prospect have an insurable need?
- Can the prospect be seen on a favorable basis?
- Is the prospect insurable?
- Can the prospect pay premiums?
Approaching the Prospect
In approaching the long-term care insurance prospect for the first time, you have three goals in mind:
- Make the prospect aware of who you are and what you do.
- Give the prospect an idea of how you can benefit him or her.
- Establish personal rapport and a feeling of trust between you.
Agents often use so-called pre-approach letters to make the initial contact with a prospect. This personalized letter may be accompanied by a brochure about the need for long-term care insurance. The letter and brochure are certainly intended to be educational, but they should also disturb the prospect's complacency. Sometimes you'll catch the prospect at just the right time—he or she knows that something needs to be done; he or she just hasn't done it yet.
You follow up the pre-approach letter with a telephone call for an appointment. If your letter has made the proper impression, the appointment should be easy to secure.
Important Note: However you prospect for long-term care insurance clients, be sure to be diligent in following any applicable policies and procedures of your company.
The First Interview
At the first meeting with the prospect, the agent wants to describe the long-term care insurance need, seek general agreement from the prospect that the need exists in his or her case, and set the stage for fact-finding. The first interview is also usually the best time to discuss how the agent gets paid for his or her services and how those services can benefit the client.
The agent wants to create a good first impression and to begin to build rapport and trust. These are necessary steps before the client will freely share confidential personal, family and financial information.
Some agents prefer to collect the facts personally at the end of the first interview. Another common practice is to give the client a fact-finding form to complete before the next interview.
In the first interview, it is important to deal with the potential need for long-term care coverage carefully. Most people have an aversion to nursing homes. They refuse to picture themselves living in one. This denial can result in lost sales if you "allow the game to be played on this field." Instead, you need to seek a different venue—a "playing field" that is less threatening to your prospect.
The agents who successfully sell long-term care insurance have found the correct playing field: the prospect's fear of economic loss due to long-term care costs. The prospect will deal with this subject rationally, unlike the fear of entering a nursing home. We can't solve the nursing home fear anyway; the best long-term care policy won't keep the insured out of a nursing home. But it will prevent the financial devastation of paying long-term care costs out-of-pocket.
Presenting and Selling the Plan
After you have gathered the facts and used them to develop one or more long-term care plans for the prospect, it is time to make the closing presentation. The agent will normally begin the presentation by restating the assumptions and key facts on which the plan is based. This serves to remind the prospect that the plan was not developed in a vacuum but used the information provided by him or her as the starting point.
The agent must, of course, secure the prospect's acceptance of the plan. If he or she balks for any reason, the agent must discover the reasons for such reluctance. Some of the most common objections and misconceptions are identified and defused in the following screens.
Addressing Concerns and Updating the Plan
The final aspect of long-term care planning is periodic plan review and update. This is an area in which agents sometimes fall short. The best-designed plan can become obsolete if long-term care costs, client financial circumstances, client objectives, or tax laws change.
As a general rule, the long-term care plan should be reviewed at least every other year.
Want more information on long-term care insurance? Take our full Insurance Continuing Education course titled Long-Term Care Concepts for your state, which includes the following topics:
- The Need for Long-Term Care
- Sources of Long-Term Care
- Paying for Long-Term Care
- Individual and Group Long-Term Care Coverage
- Partnership Policies
- Taxation of Long-Term Care Insurance
- Selling Long-Term Care Insurance
- Sample Pre-Approach Letter