You’re talking to your prospects, Bob and Rita, about retirement planning and the smart choices they need to make. You seem to be doing well as you chat with them in their living room.
But when you start talking specifically about LTCI, their attitude changes 180 degrees.
“We’re only in our late 40s,” Bob says. “We don’t need a nursing home policy right now.”
Even though buying LTCI when you’re young and healthy is the smart thing to do, it’s sometimes hard to convince people to be that farsighted. They figure this coverage is something they’ll look into as they get closer to their 60s or 70s.
You could lose any chance of making a new client at that moment — but another tool could help you gain a client.
Critical illness insurance (CI) is that tool. Unlike LTCI, it doesn’t bring up powerful emotions of denial, and it’s a lot more appealing to younger buyers. By adding CI to your sales mix, you have a far better opportunity to sell LTCI to folks in the 45 to 55-year-old age bracket, either now or in the future.
CI is a perfect product for boomers. Here’s why: Just about everyone that age knows of a contemporary who had a serious illness such as a heart attack, stroke, or bout with cancer and survived. They realize it could happen to them at any time, too, no matter how healthy they feel right now.
However, as so many people do, boomers expect to fully recover and go back to work in no time. But in the back of their minds, they know they’ll need financial support when a critical illness strikes unexpectedly. A CI policy is very easy to explain and very easy for your prospect to imagine using. Once a critical illness has been diagnosed, the CI insurance carrier pays the policyholder a lump sum that can be used for any purpose. There’s only one claim form to file. And that’s as easy as it gets.
In contrast, LTCI connotes a one-way trip to the nursing home in your prospect’s mind — something that seems pretty remote to those in their 40s and 50s. And it’s certainly something they’d rather not think about. It’s often difficult for the agent to create a sense of urgency about LTCI with folks in their 40s and 50s. The clients or prospects often ask, “Why do I need to invest in this now?”
Ask the right questions to get the right answers
Since Bob and Rita are your mission today, getting them to think seriously about the financial risks they will face for care when their health changes could be a challenge if you don’t ask them the right questions. Your sales goal is to have them make a decision and apply for a product today.
Start out with the same questions you’d ask an older couple. Ask if they have any relatives or friends who ever had a heart attack, cancer, or a stroke and survived. Get them to talk about that. And then ask, “What are your own plans for when your health changes? Have you looked at any type of protection before?”
Once you’ve begun to establish the need, you can talk about both CI and LTCI — how they differ and how the two dovetail to provide complete protection. A key point is that CI provides an immediate full lump-sum benefit on diagnosis, unlike the typical LTCI plan, which carries a 90 or 100-day elimination period and pays out month by month, or reimburses for daily care, when you have a documented need for long term care. You can point out that having CI fills a distinct gap in their coverage if they select a longer elimination period on their LTCI plan.
When a critical illness strikes, they could receive a tax-free lump sum from the insurance carrier to help pay costs for those 90 to 100 days of care, or they can use those funds to pay for any special needs their family may have. It fills in the gap of coverage perfectly. Many families purchase enough coverage to pay for the first 90 to 100 days of care, plus two years of mortgage payments and family expenses. With that strategy, a couple may purchase an LTCI policy and a CI policy as a complete package to avoid financial risks to their savings and investments.
You can ask, “Can you see how these two coverages can make a difference for you and your family when your health changes?”
With CI in your arsenal, you have a better chance of selling the LTCI policy too — ironically, perhaps, with better odds of selling both than just an LTCI policy by itself.
The dual sale won’t work every time, however. Younger buyers are often dead-set against LTCI. They often feel they have plenty of time to buy later. So, instead of trying to cram something down their throats, which rarely succeeds, you can shift gears. You can say, “I have a suggestion. Why don’t you consider getting the critical illness policy now? I can come back later when you’re ready to consider long term care insurance.”
You’ll find little sales resistance to CI because the premiums are lower, the product design is simple, coverage is broad, and the need is apparent. Making more sales boosts both your income and your morale, and when you feel good about yourself, you can make even more sales of LTCI and other products.
While your prospects may not decide to buy LTCI right now, they often will buy CI policies on your first appointment with them. Now they’re your clients. You can go back to them to talk about life insurance, annuities, mutual funds, and LTCI and potentially sell a product at every future appointment with them.
So keep in touch with these folks over the upcoming years. Use phone calls, email, and newsletters — whatever you have designed into your high-tech/high-touch marketing campaign to keep your name in front of your clients and prospects. When Bob and Rita are older, you’ll have a great opportunity to go back and sell them LTCI when they’re more receptive and ready to buy. Sure, you may have to wait and be patient for a long time. But in the interim, you’ve made at least one sale and created the opportunity for many more.
That’s a lot better than being ushered out the door and losing any chance of establishing a client relationship.
Every Bob and Rita client you have may need this new combination approach to selling LTCI. And you’ll be the best agent they could ever want.
Wilma G. Anderson provides sales training, coaching, and sales systems for agents and insurance companies. She can be reached at wilma@theltccoach.com or 720-344-0312.