LTC: Help clients make the leap from interest to planning

Clients are interested in long-term care solutions, but they often are not ready to make the jump from interest to planning. So advisors must help them to take that leap.

Steve Cain, director of sales and business development at LTCi Partners, discussed some ways advisors can present LTC solutions to clients during the Long-Term Care Impact Day held by the National Association of Insurance and Financial Advisors.

“We’re getting to the point where people understand the need for or the concept of long-term care planning,” he said.

Cain said there is a disconnect between people who believe such planning is important and advisors who discuss it and implement a plan using insurance. “We want to bridge that gap between interest and action,” he said.

Tom Riekse, managing director of LTCi Partners, cited Lincoln Financial’s Consumer Sentiment Tracker, which reported 82% of respondents are concerned about paying for LTC services for themselves or a family member. But despite this concern, LTC remains largely undiscussed in financial conversations between advisors and clients. Among respondents who said they work with an advisor, only 21% said they discussed LTC planning with their advisor, only 14% have talked about LTCi and only 7% have discussed elder care planning.

“People understand the cost but it’s the disconnect about how we make a plan and how we put it in place,” he said.

Cain said LTC business comes in to advisors in two different ways. Either the client goes through an LTC event with a family member and asks the advisor for help in creating their own plan or advisors build LTC planning into their client review sessions.

“We must ask good questions and then listen, tell stories versus citing statistics, build value and make recommendations,” he said.

He presented some ways for advisors to start the LTC conversation with clients.

1. When the client initiates the discussion.

Start by asking the client, “What motivated you to look into this today?” This question uncovers the client’s mindset.

Ask the client whether they know anyone who needed LTC or experienced an LTC event. If the client answers “no,” respond by telling a real-life story.

Then ask the client where they are in the LTC planning process. Clients may be starting to explore financing options, be ready to see a proposal or want to move forward with a strategy.

2. When the advisor initiates the discussion.

Advisors should include LTC planning as part of a comprehensive financial plan, and discuss the client’s exposure to extended-care costs in their retirement portfolio.

After discussing other LTC financing options – such as Medicaid or self-insurance – advisors should pivot to the insurance solutions. Cain listed four primary policy types: traditional LTCi, hybrid life and LTC, permanent life insurance with accelerated death benefit or chronic illness riders, or annuities with LTC riders.

Clients often don’t know what they want, so Cain suggested that instead of asking them, advisors should tell them what planning can do.

“The right plan is about what they want the policy to do,” he said.

Advisors should then explain how LTCi works by breaking down the mechanics in simple terms. For example, a lifetime maximum benefit can be explained by having the client think of it like a savings account balance.

When presenting coverage and cost options, Cain recommended advisors start with an arbitrary coverage amount to illustrate cost-benefit relationships. Premiums scale proportionately, as coverage is added or subtracted, premiums adjust accordingly.

Advisors should create an informal comparison before presenting a formal proposal. Cain recommended using side-by-side summaries to facilitate dialogue, and avoiding formal illustrations until the client’s preferences and budget are clear.

Cain suggested advisors advance the sale by asking the following questions:

• “How do you feel about what we covered?”
• “Does this address what you said was important to you?”
• “Did I miss anything?”

Advisors should avoid vague follow-ups such as “Call me when you are ready,” Cain said. Instead, advisors should set a time-bound follow-up using relatable deadlines, such as end of the month, birthdays or holidays.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.