Five LTCI markets being overlooked by most agents

By Peter Gelbwaks

Gelbwaks Executive Marketing Corp.

Sometimes, as we get caught up in the day-to-day business of life, we have a tendency to overlook excellent opportunities that are right in front of us. A philosopher once coined the words "You can't see the forest for the trees." Well, the balance of this article will give you an aerial view of the LTCI forest. There are five long term care insurance (LTCI) markets that are currently being overlooked by most agents.

No. 1 -- Existing LTCI clients

Many clients who purchased coverage in the 80s and 90s did so without an inflation benefit or a future increase option feature included. (I refer to it as a "feature" because it only allows you the choice to buy more coverage in the future without insurability questions, but I believe that it is a false sense of security for a lot of folks who say they have a plan with inflation.) Many purchased coverage from a carrier no longer marketing long term care insurance that is considered grandfathered if it was put in force prior to 1/1/97. This plan may also very well have first day coverage plus an unlimited benefit period. Even with future rate increases, in most cases, these are policies worth holding on to for your client, the reasons being that they were underpriced to begin with, your client is now 10-20 years older and probably not in as good health as when the contract was purchased. In addition, these policies are all incontestable at this point. So where is the opportunity?

There are thousands of LTCI policyholders that could use a second wrap around, boost or additional long term care insurance policy. My personal recommendation is to utilize a "cash benefit" program for that second contract, which will give your client much needed, added flexibility. This is an easy second sale and one that should be considered to keep your client up-to-date with actual costs for care.

No. 2 -- Professionals

When I speak of professionals, I am referring to doctors, attorneys, CPAs, etc. who own disability insurance (DI) contracts and are in their early 60s. Many of the older DI contracts were written with an age 65 maximum benefit period (and some with extended benefit eligibility to age 70 or 72, but at a higher premium). A lot of these plans were written with $5000-$15,000 a month in benefit. Considering the current state of the economy, many professionals will continue to work into their 70s and beyond the benefit eligibility of their DI contracts.

Specifically targeting professionals in this age group for a DI review will uncover the continuing need for coverage as these people continue working but no longer qualify for disability income coverage. LTCi makes a lot of sense (particularly cash benefit/disability-mode coverage) as the next product purchase. My only caveat here is making sure the client truly understands the difference in the qualifying triggers (i.e. in their own occupation vs. two ADL losses). Referrals from this group are also a very powerful tool many of us do not make enough use of. In many cases, it is just a question of asking them for the referral.

No.3 -- Prospects/clients who previously told you "no"

Many good prospects who were riding high on their real estate and stock market investments were convinced that those bubbles would not burst and that self-funding was a good, solid answer. In addition, the denial of the LTCI risk was bolstered by the winning attitude being reinforced in the heyday of those markets. People tend to feel invincible when things are going so well for them financially. Today, as we all know, we are living in much different times. The past year has brought a stark reality of vulnerability into many U.S. households. Many retirement plans have been altered and asset protection vs. asset accumulation are now the new buzz words.

Although he might not have ever actually said these words, Will Rogers is often credited with the saying that goes something like this: "I'm not as concerned about the return on my money as I am the return of my money." This quote is ringing true for most of us. As you well know, one of the surest ways to protect those remaining assets is with a solid LTCi contract. I truly believe that yesterday's no is today's next sale. It is now time to go revisit your past "no's" and deliver a vulnerability booster shot of LTCI.

No.4 -- Owners of home health care agencies

This is a very interesting group of entrepreneurial-minded business people. A lot of these folks are former social workers, nurses or people coming from other areas of health care, but they now earn bigger dollars than they did previously. They are also getting a daily dose of the costs for care, and most of them fully realize they are not personally immune to the LTCI issue. They don't need a lot of education on the topic, and they will tell you which carrier they prefer to be insured by. Having to deal with the claim side gives them a very good insight into who they want to do business with. Most of them, in my personal experience, are in their 40s and 50s, and they also would love your referrals of clients to them so they will welcome you for an interview.

No.5 -- People in high risk occupations

Certain professional athletes, blue-collar industry workers, and even people working out of their homes, may be having a very tough time securing DI coverage, life coverage and other kinds of insurance. Long term care insurance currently does not have any restrictions concerning this category of prospects and they, as a group, are used to being discriminated against. They will welcome your introduction of this vitally important product. Keep in mind, they will also not be "rated up" due to their occupation.

In closing, staying positive, persistent and prepared will help you persevere. It will also assist you in achieving your goals and increasing the belief in yourself during tough times. Put your creative thinking cap on and I will see you at the winner's circle.

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