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Call today: 720.344.0312 Recent LTC Articles LTCI Industry Trends Make Sales Training Imperative Insurance MARKETING May 2003 By Wilma G. Anderson It’s a great time for your agents to sell long term care insurance. The public is more aware than ever of the need for LTCI, and products have evolved to meet the needs of today’s seniors. But it’s also true that the LTCI marketplace is becoming more competitive, thus necessitating the need for your agents to learn effective sales techniques that ensure they’ll be productive and won’t get discouraged. Let’s look at some of the key trends in the industry and examine what they mean for MGAs and BGAs and their agents. The Push to Sell to Younger Clients Insurers have tightened up their underwriting recently. Insurers used to accept applicants who had had one stroke within the past three to five years. Now, they won’t take anyone who’s had a stroke or a transischemic attack (a TIA, or ministroke) in the last five years. They’re also much more restrictive on osteoporosis. LTC insurers generally won’t underwrite anyone who’s had a fracture. They’re also very cautious about anyone with diabetes. Because of tighter underwriting, the agent’s initial health interview has become more important. It doesn’t do the agent any good to submit cases that will definitely get turned down. Along with tougher underwriting, insurers are intensifying their efforts to sell LTCI to younger people as part of their continuing efforts to cut costs. Whereas people over 64 traditionally have been the prime buyers, now insurers are looking to market the product to people as young as 40. From a financial planning standpoint, this is sound thinking. While people in their 40s and 50s have a low risk of needing long term care, their risk isn’t zero. By buying early, clients ensure that they will be underwritten, and it will also enable them to lock in low premiums. Insurers want to attract younger customers because they’ll keep the policies in force much longer before using them than will older buyers. The problem is that selling LTCI to a 45-year-old is a much more difficult sale. Although not impossible, it’s difficult for agents to create the need with people who are saving for education or currently paying college tuition for their children. Long-term care just isn’t on their radar screen. Product Innovation It’s a great time to be selling LTCI because today’s policies are more consumer-friendly and rich with a variety of built-in and optional benefits. At least one insurer even pays cash benefits to family members who are providing care. Various new riders make LTCI more attractive to younger buyers, as well. For instance, some insurers are offering survivorship benefits. If a consumer buys this rider before age 65, the rider will pay the surviving spouse’s premiums for the rest of his or her life, as long as they’ve owned their policy for 10 years and have not made any claims. The rider typically costs just five percent extra. A 10-pay policy that guarantees lifetime coverage is another attractive innovation. Some insurers offer an optional return-of-premium benefit for younger clients. If the insured has not used any benefits before his or her death, the insurer will return a portion of the premium to the beneficiary. A shared benefit pool rider is another attractive development. It lets one spouse access the other spouse’s pool of benefit money if they have used up the benefits on one person’s policy. And finally, dual-purpose policies are becoming more popular. They provide LTC coverage inside a life insurance policy and are an excellent fit for some clients. How MGAs and BGAs Can Help Their Agents Sell More Many sales organizations are accustomed to giving their agents sales training and providing agents with leads. This is good, but it’s only a start. Over the years, the industry has developed an infrastructure to train agents how to sell life insurance and financial products. Most agents can adeptly conduct a sales interview and overcome typical client objections. But when it comes to selling LTCI, most agents are more or less on their own. Plus, the nature of selling LTCI is very different than with most traditional insurance products. Agents who persistently fail to sell LTCI will become discouraged. Just as destructive to their morale is when they make a sale, but fail to get the case through underwriting because the agent didn’t know how to health-qualify the prospect. Sales organizations need to be aware of agents’ ambiguous attitudes and conflicts. On one hand, agents want to sell LTCI because of its attractive commissions. But many don’t quite believe in the product and don’t know how to make the face-to-face sale. And while selling to the 60-plus crowd is challenging enough, it can be even more difficult to sell to younger people and explain all the new options in plain English. You can’t expect your agents to know how to sell LTCI without someone showing them how to avoid the most common client objections that can derail the sale. If you really want to build up your LTCI sales production, then you need to give agents the proper tools to do their job. Making the Face-to-Face Sale Agents need to know the basics of what to say when they meet with an LTCI prospect. They must know how to set up trial closes that will expose possible objections as they go along. That way, when the agent gets to the end of their presentation, the prospect won’t have any major objections, and the agent can close the sale easily. Once the agent has challenged the prospect’s denial (“It won’t happen to me”) and established the need for LTCI, he or she must show the prospect how they can pay for insurance, based on their assets and income. This removes the objection, “I can’t afford it.” The agent must be sure that the prospect really understands the product’s benefits. One trial close is, “Can you see how this feature would work when your health changes?” At key points, the agent should regularly ask the prospects if they have any questions. This will expose any objections and allow the agent to answer and continue. Every time the agent answers a question, he or she gets the prospect’s permission to go forward, and the prospect’s resistance will continue to decrease. Otherwise, an unanswered objection is likely to stick in the prospect’s mind – a little voice in the back of the mind that keeps nagging, raising doubt – and the client won’t listen to what the agent is saying to them, thus making the close an uphill battle. People can’t be sold anything they don’t really want – they’ll just cancel the policy later anyway. The agent must help and guide clients, so they’ll sell themselves, understand what they’re buying, and feel good about their decision. They’ll view the agent as a consultant and advisor, not a salesperson who is shoving something down their throats. By probing and asking questions instead of doing all the talking, agents actively engage the client in the sale. And when the client becomes a participant in the sale, the probability of closing the sale increases dramatically. Agents also must be prepared to make the transition to an investment sale if the client isn’t healthy enough to qualify for insurance. That way, the sales call isn’t wasted, and the agent has a chance to sell an annuity that can help the client save for long term care if the need arises. Training Options There are many options for training agents: in-person workshops, tele-coaching sessions, videotapes and written material. One particularly effective method is to start off with a full-day or half-day workshop. Besides giving agents the key techniques they need to know to sell LTCI, a workshop builds morale. It shows agents that you’re behind them and are serious about helping them sell the product. Instructional videotapes make a great follow-up. Agents can view the tapes at their convenience, and videotapes will reinforce the lessons learned in the workshop. Personalized coaching is also invaluable. Coaching can be delivered cost-effectively by telephone to small groups of agents. This gives the agent someone to call whenever he or she has a question. It provides a creative forum in which agents can learn both basic and advanced sales techniques. Multiple methods make it easy for agents to learn. Some people learn best by seeing a presentation, some learn by hearing, and some learn by reading. Can MGAs and BGAs afford LTC sales training for their agents? A better question is, can they afford not to do it? Lack of training produces poor results, drooping morale and agent turnover. Sales training can prevent this. For example, one national carrier saw its LTCI sales increase 34 percent after it agents were trained. So, if you want your agents to sell more LTCI and stay motivated, give them the tools to do their job effectively. You are likely to recoup your investment in training very quickly. Click here to return to list

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