Congratulations! With the rejuvenated interest in long-term-care insurance and sales "taking off," it is wise for you to suggest your clients investigate long-term-care planning options. Without this conversation, you cannot be a trusted advisor, and you put your clients at tremendous risk.
Clients have been asking their financial advisors for advice mostly initiated from personal experience. So, where do you begin? The depth of information provided by foremost unbiased education sources will depend on those sources' level of knowledge in this area.
A company representative has most likely approached you to sell their product and has taught you everything you need to know about long-term-care insurance—right? The brochures and applications are sitting in your office. Before you even think about assisting your clients, you had better sell a policy to yourself and other close family members. Unless you go through the process yourself, you will not understand the emotional aspect of the purchase and importance of selecting the safest carrier and designing a policy correctly. You will have some hard questions to ask yourself, and this is the best way to learn.
This was my first step when I decided to specialize in long-term-care insurance. My 14-year experience with an ill spouse utilizing home health care and facility care propelled me into needing to be the best specialist around. After six months, I was still wrestling: What carrier? What product? What policy design? What was affordable? I refused to make a mistake on my financial well being.
Well, you cannot afford to make a mistake with your clients' lives either. Let's review some of the particulars:
• Step One: Know the carriers' financials as well as how long they have been in business; how much they have in reserves for future claims; how many claims they have paid; and their commitment to the product. Know if they have raised premiums on past policies sold and why.
• Step Two: Read the policy specimens. Yes, in their entirely, and highlight areas that are confusing or questionable. Call the company for clarification. Know the variances in their product offerings. Know how individual products vary from group products.
• Step Three: Understand each carrier's underwriting guidelines. (If, in fact, your client wants insurance, but has a medical problem, they will become frustrated by a decline and hold you responsible.)
• Step Four: Ask the right questions, and know your clients' needs and wants. Not everyone requires the "full whammy," but some individuals want it for emotional reasons. Some couples are better served with individual policies versus a shared-benefit plan. Know the repercussions of suggesting a lesser than 5 percent compound inflation factor.
So, what is holding you back? If you can honestly answer "nothing," then go for it! If not, consult with a long-term-care insurance specialist who spends 100 percent of their time devoted to knowing the carriers and products. Impress your clients with what you know best and bring in the best for the rest. It will win you respect and more referrals.
Kathy Halverson is president of Halverson Planning, LLC and partnered with LTC Associates. Contact her at firstname.lastname@example.org.