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Call today: 720.344.0312 Recent LTC Articles Mining The Gold In Long Term Care Insurance Broker World May, 2002 By Wilma G. Anderson The senior market – particularly long term care insurance – offers enormous potential. Building an LTCI client base can give you what amounts to a lucrative long term annuity because seniors hold onto their policies many years. How do you tap that potential? I sell 400 LTC policies a year. And you too can sell LTCI in large volume – if you use the right strategies and tactics to reach the senior market. LTCI sales are increasing more than 20 percent a year. However, only six percent of Americans 65 and older already have LTC policies. There are now 34.7 million Americans over age 65, and that number will double in the next 20 years. The need is great because nursing home care costs around $50,000 a year on average, but can be far more expensive. Home care, though typically less expensive, is far from cheap. Additionally, assisted living apartments are springing up everywhere. Most people have life, health, auto, and homeowners insurance, but long term care is one of the few potentially bankrupting risks they haven’t insured. It’s estimated that 60 percent of Americans will need home care, live in an assisted living facility, or be in a nursing home at some time in their lives. Direct Mail to Create an Unending Flow of Prospects Target your market with a laser sharp focus. People age 65 to 74 are your best prospects. Most younger people just don’t see LTC as something of immediate importance to them, and a higher percentage of people 75 and older have health conditions that would prevent them from being underwritten. While many people in the 65-74 range are fairly healthy, they realize their health will change someday. They probably know friends or relatives who have gone to a nursing home or are getting home care. The issue of long term care is real to them. Though the affluent will buy LTC insurance, people with $100,000 to $600,000 of liquid assets are usually the most motivated buyers. The average household income for people who purchase long term care insurance is about $35,000 a year, according to the Health Insurance Association of America. The rich can decide to pay for long term care out-of-pocket; middle-income people cannot. So How Can You Identify These Folks? You can buy a list of qualified seniors in your area from any good mailing list vendor. You can specify age, income, zip code and other “filters” you choose. Once you have a good list, how do you reach them? Direct mail is the most effective way to reach the senior market. With the right campaign, you’ll earn many dollars in commissions for every dollar you spend on direct mail. I recommend mailing the same lead piece to the same prospects at least three or four times a year. With repetition, your response rate will gradually increase over time as the market gets used to hearing from you. Also, it’s a good idea to buy a fresh list each time to catch new arrivals to your area and those folks who have just turned 65. Many things go into an effective mailer, including the design, colors, and artwork. You can test some different designs to see how well each one works. An effective response card – a postage paid card that the recipient tears off and mails back – is crucial. Your mailing house should print the name and address of the individual on the reply cared. Then, all the prospect has to do is fill in his age and phone number. Making it as easy as possible for the prospect to respond to you improves the response rate dramatically. Have the reply cards mailed directly to you. Within 72 hours of receiving a card, call up the sender to schedule a home appointment. You many be the best person to make the follow-up calls, or it might be your assistant – whoever has the most pleasant phone voice. On the phone, ask them briefly about their health and find out if they mention any hospitalizations, diagnosis of Alzheimer’s disease, or cancer treatments. Find out if they have significant assets, such as a home and at least $40,00 in savings to protect. Making the Sale It makes sense to book appointments at your prospect’s homes, where they have all their financial and medical records handy. Serving the retiree market, you can make all your appointments in the daytime. Schedule ten appointments a week, because an average of one will cancel. Drive an ordinary car instead of a luxury vehicle to your appointments. Once inside the home, warm up your prospects with small talk and make them feel completely comfortable with you. This usually takes 15 to 20 minutes. Now, you can start talking business. Remember, if you don’t create need, you’ll never get an application. This sale is not based on logic; it’s based on creating an anticipated need for long term care insurance. You must be able to get your prospects to envision a time when their health will change. People (especially men) think they’ll just live forever or die peacefully in their sleep. You have to overcome their denial. Next, ask some questions about the prospects’ health and the medications they take. If a prospect doesn’t qualify for LTC insurance, you can discuss annuities as a means of maximizing income and savings. If prospects do qualify, ask them some key questions about how they plan to cope when their health changes. This is when you create the need. Do not go any further until you can establish the need for LTC protection in the clients’ minds. But don’t use heavy-handed scare tactics. The facts will speak for themselves. Finally, a light bulb goes off in the prospects’ minds. It dawns on them that, without insurance, long term care costs would be financially devastating. Congratulations! You’ve cleared the first big hurdle, creating the need, but you’re not home yet. You’ll probably have to overcome some objections before nailing the sale. The first objection is the myth that Medicare and/or a private Medicare supplement will cover long term care. In reality, that coverage is very limited. You must clearly explain the limits of your prospects’ existing coverage and the amount of financial risk they’re exposed to. Once people understand this, they’re much more likely to buy the product. Overcoming denial of reality is crucial. Most people like to think that “It won’t happen to me,” despite the statistics. They’ll say things like, “Everyone in my family just drops dead.” And, “Call me when I’m closer to 70.” Another objection is, “I have plenty of money to cover any costs I might have.” You can make an analogy to homeowners and auto insurance. Point out that most people have enough money to replace their home or car in case it’s damaged – and still they have insurance. Procrastination and denial can prevent your clients from getting the insurance they need to protect themselves from the devastating costs of long term care. By breaking the pattern of denial and urging them to take action now, you’ll be doing them a favor and expanding your client base. Once you sell your clients an LTC policy, you’ve opened the gates to sales of annuities and other financial products. Training Options The sales approaches that work in the senior market are often quite different from those you’ve used successfully with younger people. While there are some common elements of good salesmanship, you must be sure that you’re using the strategies proven to speak to seniors’ concerns. If you do, you can close most sales in one call. You don’t have to “reinvent the wheel,” because several firms provide effective sales training now. And you don’t have to show up for training in person. Sales training can be conducted cost-effectively and time-efficiently through a combination of telephone, coaching sessions, and written materials. Take action and start mining the gold in LTCI today. Click here to return to list

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