What is best for an LTCI prospect?

By Julie Gelbwaks Gewirtz

Gelbwaks Executive Marketing Corp.


The economy today is hitting us all harder than ever before. Businesses are closing left and right, people all over the country are losing jobs, money is tight in many U.S. households and producers are out there making an attempt to sell long term care insurance (LTCI). This is a product that many people don't even understand or think they need. It is our job to make them aware of the fact that it exists, explain what this product is all about, help them to understand the need for LTCI and show them how it can be affordable. Even when the economy is in great shape, this is a difficult task. So, why would any agent in their right mind think they could sell LTCI during such terrible times?

The answer to that question is "because people still need it," and the baby boomers are at the perfect age to buy. The need for this product has not been reduced in any way. As a matter of fact, it seems to get stronger and stronger with each passing year. America is aging, and our medical community has been very successful at keeping people alive longer -- much longer. The thought behind that is extremely positive, but the reality is that as you age and continue living, you will most likely need care. Someone has to pay for that care.

Less than 10 percent of our population has made the decision to purchase LTCI at this point. Why? What are the other 90 percent thinking? It is believed that one of the main objections is cost. Many consumers perceive this product to be too expensive. The word "perceive" is used because long term care insurance is not as expensive as people generally think. Many studies have shown that, when asked, the average consumer guesses at a premium dramatically higher than the actual cost of an LTCI policy. Part of this comes from not being educated on the subject, but the other part comes from agents across the country, who insist on showing proposals for only the "Cadillac" of policies.

Many of our industry leaders have consistently taught that a policy with 100 percent coverage for the cost of care, including an automatic inflation rider, along with all of the bells and whistles is the only way to go. Because of this, there are large segments of agents out there who believe that if their clients do not buy a very expensive, comprehensive policy, they should not buy anything at all. Well folks, I am here to officially disagree with that statement. There is no question in my mind that something is always better than nothing. It always has and it always will be that way. I cannot tell you how many stories I have heard from agents telling me that their clients thanked them over and over again for the $70 a day benefit they were paid at claim time, or the home care-only policy that covered them through their time of need.

There is no question that a top notch, high-priced policy is best for most people when they need care. For example, a lifetime benefit is still a lifetime benefit. No one will argue that it isn't the best you can get, but do our clients really need that? I honestly believe that there are hundreds of thousands of consumers out there who would be interested in buying LTCI -- even in this economy -- if we showed them just how affordable it really can be. Please do not walk away from a consumer because they believe that if they cannot afford to buy a policy with an inflation rider, then they shouldn't buy anything at all. Or the one who says, "If I can't have an unlimited benefit period, what is the point of buying the coverage?" Many of these concepts were placed into the heads of those consumers by their agents.

The idea here is to do your best to not oversell long term care insurance. Go in with a modest benefit structure and work from there. When you take somebody into the Mercedes showroom and they realize that they cannot afford one, it is extremely tough to talk them into buying a Chevy. They may be so unhappy with the situation that they end up not buying at all. This is a very apt analogy for the LTCI world we all live in. We need more people to become insured for a variety of reasons. In order to do that, we need to make agents and consumers understand that something really is better than nothing.

Our carriers have been responding to this concept in a number of ways, and I am pleased to say that there now are quite a few products for sale in the LTCI marketplace that directly address the cost issue. They have been designed to keep up with the rate of inflation for your client without a tremendous premium added to the base cost of the policy. Do not be afraid to take a look at some of these very new, innovative ideas. They may be the key to getting the bulk of the insurable population covered with LTCI.

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