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Call today: 720.344.0312 Recent LTC Articles Changes in LTCI Products Make Sales Training Imperative The Register February, 2007 By Wilma G. Anderson, IAR, RFC It’s a great time for agents and financial advisors to help clients purchase long-term-care insurance — if you know effective sales techniques that will ensure you can 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 us: 1. Insurers Have Tightened Underwriting Insurers have tightened up their underwriting over the past several years. In the past, insurance companies would 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 trans-ischemic attack (a TIA, or mini-stroke) in the last five years. Even then, it’s very problematic to get a policy issued with an applicant who has any other medical conditions after the stroke occurred. They’re also much more restrictive on osteoporosis. LTC insurers generally won’t underwrite anyone who’s had a fracture. A diabetic will be screened for peripheral neuropathy and any indication of other conditions which are a normal result from the onset of diabetes or its mismanagement. Because of tighter underwriting, the advisor’s initial health interview has become more important. It doesn’t do the advisor any good to submit cases that will definitely get turned down just to get a couple a marital discount on their premiums. You don’t want your profile at the Insurer to indicate anything except a normal ratio of declined cases. 2. Focus on Younger Prospects Along with tougher underwriting, as part of their efforts to cut claims costs, insurers are redoubling their efforts to sell LTCI to younger people. Whereas people over 64 have traditionally been the prime buyers, now insurers are looking to broaden their market to people as young as 40. From a financial planning standpoint, this is sound thinking. While people in their 40s and 5Os have a low risk of needing long-term care, their risk isn’t zero. By buying early, these clients ensure that they’ll be underwritten and they can lock in lower premiums. Insurers want to attract younger customers because they’ll keep the policies in force much longer before using them than older buyers will. The problem is that it’s a much more difficult sale to younger individuals, since it’s hard for advisors to create the need with people who are saving for their child’s education or currently paying college tuition. Long-term-care just isn’t on their radar screen. 3. Product Innovation It’s a great time to be offering LTCI because today’s policies are more consumer-friendly, rich with a variety of built-in and optional benefits. With some policies, cash benefits can be paid to family members who are providing care. Various new riders make LTCI more attractive to younger buyers. For instance, some insurers are offering survivorship benefits. If you buy 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 a little bit 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 the right client. 4. Advisors Can Get Assistance As an Advisor, ask for guidance from your MGA, GA, or B/D about how to sell LTCI since it’s a VERY different kind of sales process from start to finish. That’s where to start. Over the years, the industry has developed an infrastructure to train advisors how to sell life insurance and financial products by conducting a sales interview and overcoming objections. But when it comes to selling LTCI, advisors often tell me that they feel like they are more or less on their own. Advisors who persistently fail to sell LTCI get discouraged. They start thinking, “I don’t know if I want to do this.” Just as destructive to their morale is making a sale, but failing to get the case through underwriting because the advisor didn’t know how to health-qualify the prospect. Sales organizations need to be aware of advisors’ ambiguous attitudes and conflicts. On one hand, advisors want to sell LTCI because it’s the right thing to do for their clients. The commissions are attractive too. 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 learn to how to sell LTCI without someone showing you how to avoid the speed bumps — client objections that can derail the sale. You need to have the tools to do the best presentation, not just a sales manual to memorize. 5. Making the Face-to-Face Sale Advisors need to know the basics of what to say when they’re with an LTCI prospect. They must know how set up trial closes that will expose possible objections as they go along. That way, when they get to the end, the prospect won’t have any major objections and they can close their sale easily. Once the advisor has challenged the prospect’s denial (“It won’t happen to me”) and established the need for LTCI, he or she must show prospects how they can pay for insurance, based on their assets and income. This removes the objection, “I can’t afford it.” The advisor 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 advisor should always ask, “Do you have any questions?” This will expose any objections and allow the advisor to answer and continue. Every time the advisor answers a question, he or she gets the prospect’s permission to go forward, and their resistance will continue to decrease. An unanswered objection will 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 advisor is saying to them, making the close an uphill battle. Advisors must avoid getting painted into the “Yes-but!” corner. This is when an advisor hears the prospect’s objection and then is eager to try and challenge it. “Yes, but did you know that....etc.” This is a surefire recipe for failure. By probing and asking questions, advisors engage the client in the sale instead of doing all the talking. The client becomes a participant in the purchase. People can’t be sold anything they don’t really want — they’ll just cancel the policy later anyway. The advisor must help and guide the client/prospect, so they’ll sell themselves, understand what they’re buying and feel good about their decision. They’ll view the advisor as a consultant, not a salesperson who shoved something down their throats. Advisors who go through these steps earn the right to close the sale. The advisor and the clients will find it easy to wrap things up. Advisors also must know how to pivot to an investment sale in case the client isn’t healthy enough to qualify for insurance. That way, the sales call isn’t wasted, and the advisor has a chance to sell an annuity that can help the client save for long-term care. 6. Training Options There are many options for training advisors: in-person workshops, tele-coaching sessions, videotapes and written material. Attend a full-day or half-day workshop from a speaker who actually sells LTCI to clients, not someone who has little experience eyeball-to-eyeball with their clients. Instructional videotapes can make it easy to study at home. You can watch the DVDs at your convenience, and they will reinforce the lessons you learned in the workshop. Personalized coaching is also invaluable. Coaching can help any Advisor to reach their sales goals. Interview potential Coaches and see if one of them can give you personalized attention, if that’s what you need to become a Winner. The biggest question is: Can you afford not to learn how to sell LTCI? Get the tools to do make your sales presentations effective and powerful. Your clients need to hear a sales presentation from YOU, not your competitor. Click here to return to list

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