Long term care insurance (LTCI) is a wonderful concept that can help protect retirement plans, allow people to choose their care environment, and reduce the burden on a spouse and children. However, it can also be a tough sell -- especially in this economy.
If someone is currently in financial difficulties, they won't be a good candidate for long term care ¯ they'll have more pressing needs. However, there are still millions of boomers who are excellent candidates for LTCI.
Below are some characteristics of people who will be receptive to the idea of including LTCI in their future plans:
- Planners: You know planners ¯ the ones who have taken care of their wills, have life insurance in place, developed a well-thought-out investment strategy, and have an organized home with extra food in the basement. LTCI planning fits nicely into this group, as they can identify a potential exposure and seek protection against it.
- Highly educated: In study after study of LTCI buyers, education level plays a big role in whether someone buys. Many times, college graduates and those with advanced degrees will have an understanding of the economic and fiscal challenges facing them. They will have a better understanding that the government has limited resources to assist with LTCI and are generally more open to the idea.
- Business owners: It is not a coincidence that many insurance carriers report getting a high percentage of initial premium checks with company names on them. LTCI is deductible, just like health insurance is to a business. And small business owners love business deductions that benefit them and their family members. In addition, business owners are often skeptical of the government and want to maintain their independence.
- Those with personal experience: Boomers who have seen relatives pay out of pocket for LTCI expenses or had the experience of assisting with that care really understand the need for a long term care plan. Sit back and listen to their stories.
- Those who have finished college funding: Although some would argue that boomers might want to plan for LTCI prior to paying for children's college in order to help reduce the potential burden on the family, realistically college funding will take priority. Once that last check has been written to the college, however, thoughts will turn to the future and it is a perfect time to discuss long term care. Ask existing clients when they will be done with college funding and follow up then.
- Those with defined benefit pension plans: Defined benefit plans provide an excellent funding source for long term care premiums because they are predictable. In particular, retired military and teachers are good candidates because they can be relatively young and healthy when retired, when premiums are more affordable.
- Wealthy investors who have lost significant investments: During the market collapse, many who thought they could easily self-insure the cost of long term care may be having second thoughts about that strategy. Show them the impact the cost of care can have on a retirement plan, and then show them the solution.
- Lesbian and gay community: Lesbians and gays in committed relationships are great candidates for LTCI. First, the lesbian and gay marketplace is generally wealthier (at least in terms of male homosexual partners) and more highly educated. Second, many times they don't have children that can be caregivers. And most carriers offer the same companion discounts as for heterosexual couples.
- Single women: Single women, especially without children, can be concerned about what will happen to them if they need care. LTCI is an incredible peace of mind product.
Of course, even for the clients who are approachable, it is important to start the conversation with the idea of planning for future LTCI and retiree health care costs ¯ not with a product conversation. Finding the appropriate product should be seen as the final step. By correctly focusing on these key market segments who have a built in affinity to long term care, your sales efforts should pay off.
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