We’ve all heard about the COVID-19 “long haulers,” people who exhibit prolonged symptoms, from breathing difficulties to the infamous “brain fog,” long after they stop testing positive for the virus. We have not, as a society, talked about the practical impacts of this phenomenon: Thousands, perhaps millions, of previously healthy people will need long-term care or face at least temporary disability because of the pandemic.
While there now seems to be an end in sight for COVID-19, one thing is clear: We can never know what personal or societal crisis is around the corner. This means agents and advisors must discuss disability insurance and long-term care insurance with young, healthy clients. These individuals often have three objections to signing on to such policies, and we must be able to directly refute each one of those objections.
Objection #1: Mortality Anxiety
Facing our frailty as human beings is hard to do. Much like with mortality and life insurance, many people avoid conversations that touch on disability and long-term care, and that can hinder attempts to sign clients up for beneficial insurance policies. After more than a year of a global pandemic, with reminders of a that very frailty all around us, these conversations may get even harder.
Statistics are not on our side either. When discussing life insurance, agents can bring up the unavoidable fact that everyone dies. Conversely, “only” 1 in 3 American seniors today with LTCi will draw benefits, and “only” 1 in 4 Americans in their 20s today will become disabled before retirement. It’s easier for many people to believe they will be lucky.
Throwing these statistics at clients won’t work. Instead, use stories about individuals to demonstrate risk on a personal level. Make sure not to focus solely on the health risks — the most heartbreaking aspect of disability or LTC is often what it does to the relationships of a person with a disability or LTC needs. It is sad, but COVID-19 will leave us with plenty of examples to offer. Be empathetic and sensitive about it, but clearly explain the risks associated with rolling the dice.
Objection #2: Seeing Is Believing
We all have met people who don’t believe bad things can happen to them until they’re staring those bad things in the face. Accordingly, some clients, left to their own devices, won’t be interested in DI or LTCi until a health issue appears that forces them to see the need for it.
The problem with this approach is that DI and LTCi are most comprehensive and most affordable for young people with no health problems. It’s possible for a 45-year-old with a thyroid problem to acquire LTCi, but they will pay more for less coverage than they would have been able to obtain 10 years earlier.
Everyone has a unique set of financial needs. But nobody is getting younger, and few people get healthier over time. Make sure young clients understand that their choices with DI and LTCi include figuring out how to fit better, cheaper policies into their budgets now or how to pick up less affordable, less beneficial policies later.
Objection #3: Pricey Premiums
Even when young clients understand the risks of forgoing DI and LTCi or putting off acquiring coverage, they may still balk at the premiums they’re offered. A frequent concern for clients is that, if a DI or LTCi policy isn’t eventually needed, they’ll simply have wasted their money.
Some people will never need their policies. But a policyholder in their 20s can pay DI or LTCi premiums for 40 years and still recoup all of their total payments in just one year of insurance benefits. Explaining this can go a long way toward alleviating worries about flushing cash down the drain.
More fundamental, though, is the very concept of risk management. Both insurance companies that issue policies to 25-year-olds and 25-year-olds who forgo insurance are making the same bet: the 25-year-olds in question will not need insurance benefits. Remind young clients that the insurance companies can afford to be wrong. Clients, on the other hand, cannot.
DI and LTCi are underutilized tools for financial security, and the COVID-19 pandemic has put a spotlight on the potential consequences for even young, healthy clients. As our clients emotionally and financially recover from the past year, let’s work with them so they’re prepared for any challenge in the years to come.