Philip Gallant is a heck of a long term care insurance salesperson, writing more than $400,000 in LTCI and life premium last year. He managed those numbers while conducting extensive training for other agents and advisors. Gallant, father of Audrey, 25, and Kristen, 23, also is a bit of an aspiring comedian – maybe something he developed as a defense mechanism living in a house full of women. And while he manages to tickle others' funny bones, he knows LTCI and the future of the long term care system in this country are no laughing matter.
Gallant, executive vice president of Clifton Park, N.Y.-based New York Long-Term Care Brokers, has been in the financial services industry for 27 years and in the LTCI game since 1987 – long enough to have seen major changes in the way LTCI is built and sold. He also has seen industry-wide sales dip over the past few years, but he doesn't attribute that to a lack of awareness.
"I don't think that it is a lack of awareness," says Gallant, a huge fan of building and sustaining alliances with financial advisors, "as I think it is a lack of priority."
In order to change that, Gallant is on a mission to educate financial professionals and consumers. Until LTCI is established as a priority in the financial planning process – right up there with annuities, life insurance, IRAs, etc. – sales will suffer. And if LTCI sales suffer, everybody suffers, because Medicaid and Medicare will collapse under the weight of 78 million baby boomers who eventually will need care.
Gallant manages to find time for his hobbies – golf, camping and going to baseball games. He also donates his time to the Double H Hole in the Woods Ranch, a charity camp established by actor Paul Newman for underprivileged children on Lake Lucerne. Mostly what Gallant does, however, is protect people's future – and shield families from the costly burdens of caregiving.
Senior Market Advisor: Why LTCI? What made you make that jump almost 20 years ago?
Philip Gallant: One of my clients was running for political office. I was managing his campaign. We were doing a door-to-door effort one day. I said, "Let's go here because I know this fellow. He's a client of mine." He asked me about a nursing home policy. Not knowing about anything about it, and not having heard about it, I said maybe Medicare pays for that, but let me look into that. As a result of looking into it, I got deeply involved early on because I found out that Medicare doesn't pay for care in a nursing home. It doesn't do what I thought it did back then. So I did some research and I began my career as an agent. I was a regional manager for AMEX, back when AMEX was the big player. I got involved because someone asked me about it, but then I saw a tremendous opportunity and a tremendous need. I've always been a fan of Dr. Ken Dychtwald, the Age Wave. I've read his book. Actually, I had bought a tape series prior to reading "Age Wave," which was called High Performance Living, which was pretty influential on me. In that book, and in the tape series, he talks a lot about aging and about what's coming down the road. It sort of all came together. It was all coincidental that I was listening to that tape series at the same time I started to get involved in long term care.
SMA: You said you saw a tremendous need for it. It seems that need is still there. What is holding people back from getting LTCI? Why is there still such a tremendous need?
PG: There are two issues going on. The first issue is that people are living longer than ever before and they see their parents living longer. The long term care that their parents are experiencing today is different than the nursing home disasters that they saw in years past. The nuclear family isn't the way it used to be in terms of geography. People are living all over the country. You may have a mom in a nursing home, but the day-to-day impact of that isn't the same if she lives 400 miles away. You feel badly about it and you want to help and you want to be there, but if it is your family, it is not as close to home as it used to be. I remember when my grandmothers were in the nursing home, they were in the town I lived in. We used to go see them on a regular basis. But because families are spread all over the country today, the real family impact doesn't hit home the way it used to. There's a tremendous amount of denial that people are going to ever experience that situation.
SMA: What is the other thing?
PG: The other issue is that financial advisors find that the product is complicated and it is a difficult subject matter. People seek advice from investment advisors and ask them about long term care insurance. Very often, I have found that the advisors will either say that you've got money to pay for that or that it's not an area of expertise that I'm involved in. Or the subject kind of gets discussed and never revisited because it's not brought to the top of the plan. Most advisors are working in helping people accumulate and distribute assets. There needs to be more partnerships between financial advisors and LTC specialists. One of the issues is that LTC specialists need to understand what financial advisors do and not operate in a vacuum.
SMA: Why have alliances become as popular as they have, and what are a couple of the key elements to building those alliances?
PG: Ninety-five percent of my business comes from alliances. Referrals come from two or three primary ones. I work very closely with a credit union in the mid-Hudson Valley of New York that puts on retirement seminars. The credit union has a registered investment advisor on staff who they pay to help people keep money tied to the credit union. If it's not in the credit union's saving and certificate programs, they at least want to be involved in helping their members with financial planning. Of course, they generate revenue from their financial planning department. But what they found was that they were having a lot of members asking them about insurance products and, in particular, long term care products. The reason this alliance works so well is that I do not, and never plan to – and never say never, but I don't plan to in my career – become involved in the securities side of the fence. So I'm not a threat to them. When I come in and talk to their clients, they don't need to worry about me going after any of the other business. They know that I'm very focused on helping them with the fixed side of the fence, if that's what they want, and particularly in long term care planning. So, when I work with financial advisors, it's very clear that I'm part of their team. And their client is their client. I'm there as a consultant and I'm an expert in this area to help the financial advisor look better to their client and provide better service.
SMA: So you don't carry the securities license, but the people you work with do?
PG: I really do think that's the key. It is hard to go to a financial advisor and offer to do the long term care planning for them if you also carry the same licenses.
SMA: What are the keys to success as an LTCI salesperson? What kind of personality traits do you need to have? What educational avenues do you need to pursue to be successful?
PG: First of all, you should get a designation. I am a CLTC. I think that is an extremely good course and provides very good information about all of the various aspects of long term care planning, from the governmental issues to the building of the appropriate policies. It is important to get as educated as you possibly can. In this marketplace, the skill you need to develop more than any other is listening skills.
SMA: What does that gain you?
PG: I start every long term care interview with the same question: "Why do you want long term care insurance?" I believe people want it and they just don't want to pay for it. But I'll have people say to me sometimes, "I'm not sure I do want it." I'll always respond by saying, "Well, if it were free, if it were just a matter of enrolling, would you sign up for it? Would you enroll?" Almost universally, the answer is yes. We talk about why and what is the insurance going to be able to provide them that they can't currently provide for themselves. Then we get into a discussion about why they want it. The knee-jerk reaction for most people is that they want to protect assets. But in reality, I'm finding that people want to be in control if they ever need care. Whether that means choosing whether they stay at home to receive the care and have the ability to pay family members, whether they can be assured that they will have the highest quality of care that they can possibly have and really ease the burden for their family. I think choice and quality of care and not being a burden on the family are really the issues in motivating people to purchase it.
SMA: Do most advisors miss that point?
PG: Early on in the long term care industry, I think we made a fundamental mistake in over-emphasizing the asset protection side of the equation. In the baby boom generation, it is going to be very hard to make the sale based on asset protection just because many of them don't feel the same way as the prior generation in terms of passing a large estate to their heirs. They are concerned that they are not a burden to their children.
SMA: That's a subtle shift. There is still the misconception that LTCI is nursing home insurance. How do you get past that?
PG: I'll bring that right to the table. When I talk about why do you want long term care insurance, the discussion very often gets to, and very quickly, they don't plan on going to a nursing home. If there's any denial, it's about going to a nursing home. People are petrified of ending their lives in that kind of an environment. So the first things I'll do in my presentation – I always use a laptop and do a PowerPoint presentation – the first four or five slides present a very clear discussion about what long term care is. We talk about the activities of daily living from the standpoint that when you are born, when you come home, you have no ability to perform any of them except eating. If there is a food source, a baby can, by nature, feed itself. But everything else has to be done. Human assistance is needed with transferring and bathing and dressing and toileting and incontinence. Those are things that if you don't help the baby to do, the baby will die. So we talk about the daily activities when you are a child and how you nurture your children that way. As you get older, you get into teaching your teenagers about the instrumental activities of daily living, or IADLs, like using a computer and telephone and learning how to do laundry and cook and clean and handle money and all of those things. We go through our working years and some of us are better at those things than others, but we mange to function during our lifetime. As we get older, sometimes we view caring for our parents or caring for our spouse, we call the IADLs care when really we are helping them. We need help again with paying the bills, driving to the doctor, cooking. Many times we'll hear people say I'm caring for my mom and dad. I have to go over there and cook and freeze the food so it's easier for them and so on. Then we talk about the fact that 50 percent to 60 percent of us are going to cross that line again and need human assistance again with the activities of daily living. We tend to need them and lose them in reverse order that we learned them. We need help with bathing, dressing, transferring from a bed to a chair. So it's a kind of clinical approach to the teaching of the ADLs, explaining that is what creates the need for care as well as the cognitive issues.
SMA: What's next after you discuss the cognitive issues?
PG: The next slide always talks about how we put names on those diseases or conditions, if you will, that are more familiar and less clinical, like strokes and arthritis and diabetes and fractures and falls and Parkinson's disease and so on. At the end of that slide, that third slide, I will always ask people the following question: "Mr. and Mrs. Prospect, is there a possibility, or even a probability that one of the two of you is going to need this kind of care for more than six months before you pass away?" It's important to get that agreement. Not that you are going to go to a nursing home, but that you are going to need the care. Inevitably, people will say yes. It's a possibility and it's probable that one of us will need it. That's an important discussion at the beginning of the sales process to get people to really focus on the fact that this is about caring for yourself, not about going to a nursing home. Once we get agreement that's the issue, the next question is this: "What are your plans now for when your health changes?" I credit that question to Wilma Anderson. I think it's a very powerful question and I'll use it a lot. That's sort of the bullet between the eyes, if you will, that people realize that they don't have a plan. Most people realize that the government doesn't have a plan either in Medicaid.
SMA: Do people understand Medicaid or Medicare isn't the answer?
PG: I don't see that it's changed a lot from years ago where you really talked about debunking the Medicare myth. People today know that Medicare isn't going to pay for it. I don't spend a lot of time on that. I ask them what they think the government's plans are. Most of the people are very pragmatic and realistic. They know they can't rely on the government for this. Personal responsibility is really where it's at.
