Casual LTC Producers: Are They Friend Or Foe?
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Several trends have propelled the recent popularity of long term care insurance policies, including an expanding senior market and an LTC awareness campaign by the federal government.
You might assume the more people who hear about LTC the better–because a lack of education is the most important hurdle facing the LTC insurance industry today.
But where people learn about LTC does make a difference. An uneducated agent can do more harm than good, both to the industry and to customers.
After all, LTC is not just a financial sell. Its an emotional sell, and LTC customers can be very vulnerable. More and more aging baby boomers want to maintain their independence as they grow older, while not becoming a burden to their children. They want to ensure theyll have quality care throughout the rest of their lives while protecting their assets. So they are looking for someone to help them.
Unfortunately, most of these customers will turn to the same insurance agent who provides them with policies for life, home, and property and casualty insurance, etc.
Thats like going to your primary care physician to be treated for a brain tumor. When you want a detailed diagnosis and treatment plan, you should see a specialist.
The generalist agents are often good at what they do. But they fall into the category of what I call the "casual" LTC produceri.e., one who sells LTC only now and then.
The problem they present stems from this: Someone who is seeking LTC insurance needs to meet with an LTC specialist, not an insurance generalist. LTC is a very complicated and technical product that needs to be explained by a person whos knowledgeable about the specific policies. Benefits, definitions, and prices can–and do–vary. A generalist cannot possibly stay abreast of all of this detail and also address unique LTC needs.
Furthermore, insurance generalists who dont fully understand the components of LTC many times default to the only aspect thats familiar to them: price. If customers make LTC decisions based on price alone, they are being blindly led down an uncertain path.
