Part One
The Agent
“You miss 100 percent of the shots you never take.”
– Wayne Gretzky
Here’s a key issue in black and white:
63 percent of 300 producers surveyed in a 2004 LIMRA report stated that they do not own a long-term care insurance product.1
Do as I say, not as I do?
Believability is one of the traits buyers like from sellers. If you have not considered this product in your own portfolio, how do you convince others that this is the right product for them to buy? Even if you put up a good front about the need for this coverage, what do you say when the prospect asks you if you own the policy yourself?
We are agents but we are also consumers. The same concerns we all have in life must be faced. An agent and family are as at risk for a long-term care event as the prospects they meet.
Since the majority of the sale is focused on the need for long-term care and whether and how it fits in one’s overall plan for the future, it only makes sense for you to look to your own house first. What would you do if a long-term care need arose? How would it be paid for today? What family members would have to get involved if no plan exists?
Stop 1 on our agent tour: Do you have long-term care coverage yourself? Why or why not?
The answer to this question will likely dictate how well your LTC sales career will go. Virtually all of the successful LTC agents I know own a policy. A small number of other leading LTC agents are uninsurable, making them quite passionate about this element of a financial plan. They want others to purchase this coverage before they, too, are unable medically to qualify for it.
When you buy something from someone, does your purchase depend as much on the salesperson’s attitude as anything else? I want the person selling me something I know little about to come across as an expert in the subject. Inevitably, I will ask what they themselves have purchased. Not only does that tell me the person believes in their product, but it is also helpful to hear why they bought what they did.
The same has occurred in a long-term care sales interview. There are any number of times, after I’ve shown the prospect my own policy that the person will say, “I’d like the same coverage you have.” I think that’s a closing signal, don’t you?
Owning your own LTC policy is not the only positive movement towards enhanced sales performance, but it’s a significant first step.
Herding Cats
“Without a struggle, there can be no progress.”
– Frederick Douglass
Rod Stewart sang, many years ago, “Every picture tells a story, don’t it?” Picture this:
| • $981.5 million • $1.03 billion • $1.16 billion • $935.3 million • Less than $700.0 million |
These numbers2 represent the premium volume of long-term care insurance for the years 2000-2004. It reads like the rise and fall of the LTC industry. With 2005 also on a further slide, LTC sales are experiencing the La Nina effect. Certainly, it’s not heading in the sales direction we’d all like to see.
An LTC insurance specialist in northern Virginia is thinking of getting a salaried job to supplement her income because LTCI sales are so slow. She blames insurance companies because of price increases and lack of national advertising.3
In the February 2006 issue of Financial Planning, an investment advisor wrote, “Over the course of the year, we’ll look at how to build a lifetime investment plan for retiring baby boomers.”4 The year wasn’t long enough in the article to include any mention of protecting this lifetime plan with long-term care insurance.
It seems like many insurance agents are now into inventory management. Today, Wal-Mart, Target, Home Depot, and others are only putting items on the shelf that sell enough units to make it worth the space it takes up. This “only stock it if it sells” philosophy has apparently spilled over into the insurance business, because LTC coverage is sadly missing in the majority of producers’ offerings for their clients.5
| A 2006 poll as to how well agents who set 2005 long-term care sales goals did, revealed the following:6 • 53 percent fell short of their LTCI sales goals by 50% or more • 16 percent fell short of their LTCI sales goals by 25% • 22 percent met their LTCI sales goals • 6 percent exceeded their LTCI sales goals by 25% • 2 percent exceeded sales goals by 50% or more |
I’m convinced many agents simply aren’t stocking it on their shelf. If you don’t ask anyone to buy long-term care insurance, you won’t make any sales. That great sage himself, Shaquille O’Neal, once said that excellence is not a singular act, but a habit. You are what you repeatedly do.
Apparently, we’ve stopped talking to our clients about long-term care.
Sure, it’s not an easy sale. When asked what product did they have the most trouble convincing their clients to buy, insurance agents in 2005 most often said long-term care and life insurance.7
Many agents I know are in the same kind of waiting game that their clients’ financial plans are in. They are waiting for Congress to give them an above-the-line discount on the product to make it easier to sell. They are waiting on consumers to realize what an important issue this is for their future. They are waiting for employers to more aggressively pursue long-term care as a key benefit to make part of their employee benefit offerings. As one agent put it, they might as well all be waiting for Godot.8
But our waiting game is costing our clients and prospects dearly. Our retreat is their loss. The opportunity to buy long-term care insurance to protect their needs will only come if we begin to make it a habit of asking them about this issue.
If agents are a lot like consumers today, will it take something like the following to happen to motivate their actions in this market?
| “In 1974, a hit and run car struck my mother. The accident forever changed her life and mine. My mother was left needing long-term care until she died in 1998. Her care needs ran the gamut from acute to nursing facility to home care. She didn’t have long-term care insurance, so managing and financing her care was left up to me. Like so many who go through this experience, I often found the emotional and financial stress overwhelming.”9 |
This experience prompted the agent to start an agency devoted to selling long-term care insurance. No need to motivate this individual; he lived through it. I talked to another agent recently whose mother has been on claim for several years and whose spouse has recently joined her. He does not know what he would have done financially and emotionally without both of them having LTC insurance.
But just as we can’t let our clients wait until a long-term care event happens, as agents we cannot afford to wait until something happens close to us to kick-start LTC sales activity. This should be a daily pursuit and, as you will see later in this chapter, it is relatively easy to work it into your normal routine with your primary sales work.
Moreover, this is the time when we should all be stepping up our pace in long-term care insurance activity. Despite the appearance of consumer apathy, a 2005 survey found that seven out of ten people nearing retirement believe it is “very important” to be able to afford necessary medical or nursing home care.10
With the millions and millions of people nearing retirement age, there is no shortage of people to speak with today about long-term care. For number geeks, 7,918 Americans will turn age 60 every day in 2006. That’s about 330 people per hour.11 Long-term care insurance prospects, all.
Your Buying Public
“You can trust the Americans to do the right thing, but only after they’ve tried everything else first.”
–Winston Churchill
While one can argue that the recent downturn in long-term care sales can largely be laid at the feet of the buying public, I don’t buy it. It is fair to say that the consumer has issues that must be overcome to be consistently successful at long-term care sales.
It is agents who must first prevail over their perceptions of long-term care insurance. Then they can help sway undecided prospects about the value of this coverage.
The general public has never been easy to persuade about insurance, no matter what the coverage is you are selling. Even the mandated policies – auto and homeowners’ – are no easy sale and are constantly shopped by many.
Let’s break down some of the obstacles:
1. Behavioral economics can explain some of the consumer’s conduct when it comes to considering this product, and an understanding of how your prospect might think about LTC insurance may help you overcome your own concerns about selling it.
Behavioral economics says, “As long as there are some opportunity costs to learning or to experimenting with a new strategy, even a completely ‘rational’ learner will choose not to experiment.”12 Even the best and brightest among the consuming public may balk at long-term care insurance because it is a relatively new means of dealing with these unreimbursed health expenses. At any rate, it is a good excuse to put any de...