4 tips for selling long-term care insurance

Agents selling long-term-care insurance (LTCI) have witnessed several important developments recently, including, in some cases, a reduction in new business premiums for the first time in many years. An understanding of these trends will help them develop sales and marketing strategies designed to increase sales.

One significant development is that long-term interest rates have increased, allowing insurers to get better investment returns on their product, according to Tom Riekse, managing director of LTCI Partners, LLC. As a consequence, he said, some long-term-care carriers have reduced new business premiums this year.

Also, awareness of long-term care and long-term-care planning during the COVID pandemic increased dramatically, and consumers are seeking solutions that will give them flexibility to stay at home or seek care in a high-quality residential setting, he said. In addition, wage inflation means that care costs have increased; so, many advisors are looking at LTCI for even higher-net-worth individuals.

Finally, new entrants to the LTC market are offering innovative products with streamlined underwriting or benefits that are built on an indexed or a variable life chassis. All of these trends should continue into 2023, according to Riekse.

Washington Cares Fund

By far, the biggest legislative trend was the impact of the Washington Cares Fund and the ability for many Washingtonians to elect a private LTC insurance option and exempt out of the .58% payroll tax, Riekse said. Almost 500,000 state residents chose to do so. Now, states from California to Pennsylvania are looking at possible similar programs. Because of this, there is a huge urgency for people who want to exempt themselves from possible future payroll taxes to look at LTC insurance now – and not wait, according to Riekse.

The highest increase in sales has come from voluntary guaranteed issue life/LTC insurance plans that are offered on a voluntary basis to large companies, said Riekse. Based on their success, carriers are developing similar programs for smaller and midsized companies that won’t include guaranteed issue underwriting, but may offer accelerated and simplified-issue products.

Tips for Selling LTCI

To help agents as they work with prospects and clients to generate more sales, Craig Roers, head of marketing for Newman Long-Term Care, offered these helpful hints:

• Start conversations: Advisors need to proactively start having extended care conversations with clients and continue those discussions annually until the client outlines their wishes for future care needs. “Don’t start by talking insurance. Insurance can help fund the plan, but until someone communicates where they might wish to receive care, and who might provide it, it’s hard to get them to think about paying premiums,” he said.
• Don’t stop at the first “no”: The LTCI sales cycle can take years; so, don’t stop at the first “No.” The prospect might not yet be in the right place, or might have had an experience with someone close to them needing care. “Regularly revisiting those prospects and doing drip marketing to them will keep you top of mind when they finally are ready to talk,” Roers pointed out.
• Birthday marketing: You can also do birthday-related marketing, sending prospects a gentle reminder that age and health are two of the biggest drivers of insurance costs. Reach out two weeks before their birthday and offer to show them rates for their current age and their next age, Roers added. Many insurers will allow you to save the younger age for up to 30 days after a birthday, but the two-week advance notice does help to create some urgency with the client.
• Raise the topic: Commit to bringing up the topic, even if you aren’t an expert on the solutions. With hundreds of LTCI specialists across the country, you don’t have to be an expert. They know the pricing, underwriting and benefits of the leading carriers and can be your on-call resource. Most specialists will split the commissions with you. “All you have to do is tee up the topic with the client, and then provide a warm introduction to your LTCI specialist. They’ll do the rest. “This will allow you to serve your clients’ needs, let you stay focused on other lines of business and avoid taking on other overhead or other costs,” he said.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]. 

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Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].