There are many reasons why more agents are not selling long-term care insurance (LTCI). They may not have been properly trained to do so, they may not believe in the product, they may not own it themselves, they may have tried selling it and were not successful or their prospects could not meet the underwriting requirements. Of course, many people also believe that LTCI is new, although it is not.
I always read about the problems some agents have with finding prospects and selling LTCI. Frankly, those are just part of the problem. In fact, my advice to agents who want success in this market is to stop trying to sell LTCI and start developing a plan to protect their clients' assets with LTCI.
I am a specialist in LTCI. When I talk to agents who have 2,000 or more clients, I sometimes wonder if some of those clients don't have at least $100,000 or more in assets, and if those clients are insurable. I suspect the average agent could identify from 5 percent to 20 percent of his clients who meet these criteria. What a great opportunity for him to help both his clients and his firm!
The agent who wants success in selling LTCI has two choices: Learn how to help his clients determine their need for LTCI and then write the applications, or have an LTCI specialist do the work for him.
My steps to success
Here are some of the things I do when working with my prospects. When we meet, I usually ask this question after a little chitchat: "Who would like to tell me why they might want a long-term care insurance policy?" When I asked this question of a husband-and-wife team recently, the wife looked at me and then at her husband and said, "He doesn't know why. I will tell you why!"
She then spent the next five minutes describing how she was trying to figure out how to find help to take care of her mother and did not want this to happen to her children. From that answer, I learned why I was there and that it was essential to help her plan ahead so her children would not have to go through what she was going through.
I also make it a point to practice my home-interview skills on the way to an appointment and between appointments. I usually practice at least once a day because it is a series of steps that must be practiced. If you skip one step, you might not be successful.
Step No. 1: After I ask prospects why they want an LTCI policy, I ask them if someone has told them they should buy LTCI and how long they have been thinking about their risk of needing long-term care. I then assure them that understanding LTCI is not as complicated as it first appears, and we should review a few items to help them decide today how they want to manage their risk.
Step No. 2: We examine the levels of risk they have in their home burning down, their car being totaled and their need for major short-term health care. All of these risks are typically insured. We then discuss the possibility of using some interest from their savings to pay for LTCI, which covers risk and protects their savings. It is a win-win situation in all cases—their decisions are driven by both business and emotional reasons.
Step No. 3: We go through the different sections of the policy and develop a plan. I cost out the premium and present it to the prospect who now has a complete picture of how the policy works, how to activate the policy and what it costs him to protect his savings.
Step No. 4: My close is simply to ask the prospect, "What do you want to do?" Most prospects either want to complete the application form there and then, or want to think about it. They also might admit they cannot afford the cost of the premium, which means I did not properly screen them during my phone interview. At that time, I should have asked them this question: "Most people I work with own their own home and have at least $100,000 in assets. Would you put yourselves in that category?" If they say they want to think about it, I ask them how long they need to think about it. If they say a week or so, I ask them to get out their calendar so we can agree on a date to meet again.
Conducting an LTCI home interview is a simple process. What may be difficult is trying not to sell prospects anything but just presenting information to them and answering their questions so they can make informed decisions on two issues: to self insure or to transfer the risk to an insurance company—just as they have done for their health, their cars and their homes.
Walter E. Kreutzer, CSA, LTCP, is with Genworth Financial (Stone Hill-National Network) and sells LTCI. He is the immediate past president of NAIFA-Fredericksburg (Va.) and can be reached at email@example.com or at 540-720-7169.