Your next LTCI sales idea: "Is it called global warming or climate change?"
By Stephen D. Forman (LTCA)
Long Term Care Associates, Inc.
I think in our field of long term care insurance for too long we've allowed our industry to be framed by others in terms we'd not choose for ourselves.
Let me assure you, I know better than to mix business and politics. But I also believe in learning from the best, and in the case of "framing", few are better than Republican strategist Frank Luntz.
In a leaked strategy memo from 2002, he acknowledged the party's vulnerability on environmental issues. The Luntz memo not only discussed strategy, but also included a section called "Language that Works". In it he urged, "Climate change is less frightening than global warming ... While global warming has catastrophic connotations attached to it, climate change suggests a more controllable and less emotional challenge." His advice was heeded, and the Bush administration stuck to the script thenceforward.
A savvy word artist, Luntz is also credited with coining names for the "healthy forests" and "clear skies" acts — legislation attacked by the Democrats for allowing clear-cutting by the timber industry and mercury-polluting by the coal industry respectively.
Whether you view him as hero or villain, we could all use a Frank Luntz in our marketing departments. It's to our advantage to employ language that works, and to discard words which don't. Broadly speaking, how you steer the conversation — or allow your clients to pre-empt you and steer it — is called framing. If you're any kind of political junkie, then you'll recognize how each side races to get ahead of the story and frame a controversial issue before their opponent can.
I think in our field of long term care insurance for too long we've allowed our industry to be framed by others in terms we'd not choose for ourselves — but that's a topic for a future issue. Today I'm going to confine my remarks to two specific terms you can put to use immediately.
First, if there's any word I'd banish from the English language, it's self-insurance. Nothing makes me cringe quite like the sound of a producer asking, "My client wants to self-insure, what should I do?" What you should do is re-frame the conversation: There is no such thing as self-insurance. There is only insured and uninsured.
Self-insured connotes a choice wealthy pontificators make after much deliberation. Uninsured connotes a choice which has been foisted upon the poor, sick or ill-informed. After all, when we speak of the 52 million Americans without health insurance, do we refer to them as self-insurers? Of course not, it's ridiculous.
Everyone recognizes they're uninsured. And to be uninsured is to feel vulnerable, which is exactly how your wealthy client must feel before he will accept a solution to the problem he's been denying up until now.
You mustn't give ground and allow your prospects to frame the conversation. For the entirety of my formative years in this business, I was trained that allowing the government to pay for your care meant going on welfare. As a point of pride, no one dared dream of such a thing. It was almost said in a hush.
Nowadays, it's been re-framed as "going on Medicaid” — and not only does this frame hold no stigma, it's mainstream enough that the middleclass and affluent can openly discuss Medicaid planning with their elderlaw attorneys. That's what happens when you give ground and lose your frame. As an aside, I don't want anyone to be distracted by my saying there's no such thing as self-insurance. The concept can be applied under the proper circumstances, simply not by individuals1. Just last month in my resident state of Washington an organization known as Samaritan Ministries was found to be self-insuring so well that they violated state law (the unauthorized transaction of insurance).
Our second term has something in common with the first: it's one to avoid. This finding was just one of many from the immensely useful "Reclaiming the Future" study conducted by Allianz Life in May, 2010. Of particular use to us, the researchers discovered that when consumers nearing retirement were allowed to build their ideal financial product, they almost universally built an annuity-like product.
In order of importance, they desired:
1) a stable and predictable standard of living in retirement,
2) a guaranteed income stream for life,
3) a product guaranteed not to lose value,
4) protection against market downside, and
5) a product which was stable and predictable which they didn't have to think about.
It seems the word itself brings up too many bad associations — apparently because so many people formed their opinions of annuities many years ago, and clung to them. Locked into their biases, they haven't kept up with the changes. (Sounds a lot like long term care insurance doesn't it?)
Ironically, owners of annuities ranked highest in customer satisfaction of all financial instruments except for gold and precious metals. The upshot here is that the market is ready and willing; we need only choose our words more carefully to reach the frequency they are tuned to.
Where do we go from here? There was a time not so long ago when the products we sold were marketed as nursing home insurance, and now that terminology is unthinkable. It may be that the term long term care is already on the way out — perhaps like the word annuity above, people have formed biases and the term is tainted. One prominent national trainer cautions us to use “extended care” now, while PPACA introduced the nation to “long term services and supports.”
It might also be true that many people don't distinguish between global warming and climate change. But I wouldn't take that chance if I've got commission riding on it. Instead, take this lesson to heart, "A picture may be worth a thousand words... but don't forget to 'frame it'."
1 Insurance requires the following prerequisites a) a large group to spread the risks, b) losses which can be well-defined, c) individual occurrences which must be unpredictable or accidental, d) losses which are large enough to cause hardship, e) the chance of loss must be calculable, f) the risk of loss must not be catastrophic (ie, likely to affect a great many insureds at once), and g) the cost of insuring must be economically feasible. Ergo, one does not insure one's self.