This November, we’re taking a closer look at LTC insurance – and easy ways for you to start a difficult conversation with clients.
The range of products that can meet your clients’ needs has grown over the past few years, from standalone policies to riders on a life insurance policy or annuity. For value-minded clients, this is a golden opportunity.
LTC Coverage Types
- Standalone policy. Sales of traditional LTC policies have dropped over the past few years, thanks to rising costs. However, they still make sense for clients who want full LTC coverage that doesn’t affect their life insurance coverage.
23.6% of long-term care insurance buyers make the purchase to protect their assets. By comparison, 18.1% buy it for peace of mind.Standalone policy with informal caregiver benefit. Informal caregiver benefits allow your client’s caregivers (family members, usually) to be paid a certain percentage of the home health care daily benefit amount. Family members can actually get paid to help with cooking, cleaning, grocery shopping, and other things they likely help your client with every day.
- Life insurance policy with LTC rider. A standard life insurance policy with an LTC rider allows for an acceleration of the death benefit if your client needs the money to pay for long-term care. If your client doesn’t need it, the full policy face value goes to their beneficiaries.
- Annuity with LTC rider. Some carriers offer annuities that offer both: (a) a guaranteed interest rate with a percentage that can be withdrawn free of charge, and (b) a pool of benefits available for long-term care costs that can be withdrawn on a tax-qualified basis. The benefits for the client include a traditional annuity, minimal underwriting (no exam), and long-term care benefits—all in one product.
Who Needs Coverage?
We know, we know – no one wants to talk about long-term care. But talking about it is only a teensy fraction as painful as paying for it.
52% of LTC policyholders said they have provided care for someone with a chronic illness or disability.
Don’t believe us? You should – unless you have a spare $36,608 lying around (and live in Louisiana). If you live in North Dakota, you’ll need more like $62,142. These average costs should be enough to convince you and your clients that it's worth the discussion. There’s a significant variance in rates nationwide, so one interesting conversation starter might be to ask clients where they plan on retiring…and then pull up that state’s average yearly LTC cost.
Keep in mind that these figures are going to rise each and every year. As Baby Boomers age and need care, facilities and staff are often hard-pressed to keep up with demand, which means higher costs for everyone. According to the 2015 edition of Genworth’s Cost of Care survey, every segment of home and community care is getting more expensive. For example, adult day care rose in average cost by 5.94% ...in one year. Ouch.
Get Started Selling Long-Term Care Insurance
We’ve put together a free sales kit to help you get started selling LTC and LTC combo products. Click here to download the kit – it’s got stats, product overviews, ideal consumer profiles, and consumer-ready flyers you can email to prospects. The statistics make good sharable social media posts, too. Sometimes all it takes it a moment of “whoa” to convince a prospect to take action.
When asked how LTC policyholders first learned about their policy, 34.7% said it was through family or friends. Only 8.7% said it was because of an insurance agent or broker.
What’s the next step? Start looking through your book of business. According to a Mutual of Omaha LTC buyer study, the typical LTC buyer fits this profile:
- Female, Caucasian, age 55-64
- Married with adult children
- White-collar professional
- Lives in a metropolitan area
Ready to get started? Here’s a quick-start to-do list:
- Download our sales kit
- Check out the consumer research brochure inside
- Match the traits and criteria there with folks in your book of business
- Reach out to them with the flyers and stats provided in the sales kit
- Call us at 800-823-4852 and ask to speak to a brokerage director about LTC