When advisor Berry Brown recently closed a client on a long term care insurance policy, it was both a personal milestone for him and a harbinger for the LTCI marketplace as a whole.
"This was the first time I sold a policy to someone younger than me," says the 44-year-old Brown, principal at Guardian Wealth Protection, an LTCI-focused firm in Wildwood, Mo. And the sale to someone that age wasn't an aberration, he says, but rather an indication of a sharp rise in LTCI awareness and interest within the 40-something set. "Just in the last 18 months or so I've seen a lot of inquiries from people in their forties and early fifties. They are actually being proactive. Right now they are head and shoulders more informed [about LTCI] than people were 10 years ago. There's very little denial anymore [about needing a policy to address the likelihood of needing some form of care]. The message is getting out there."
The returns LTCI specialist Julie S. Hurst, CLTC, LTCP, CSA, received on a recent mailer helped convince her that LTCI market demographics are indeed shifting. "About 80 percent of the responses came from people ages 48 to 58. I was shocked."
A surge in demand for LTCI among younger clients is good news for advisors like Brown and Hurst, who for years have been attempting to crack the 40-something demographic, only to find that their younger targets were largely indifferent to the product. So what's behind the awakening? Why are more people in their 40s suddenly showing heightened interest in LTCI? And how are advisors accustomed to working with people in their 50s and 60s now gaining traction within an age group that historically has turned its back on the product?
The answers to those questions are rooted in the issue of need. From the buyer's perspective, first-hand experiences with family members have persuaded more 40-somethings that LTCI is a product they need . "Lots of the inquiries I'm getting are from people in their 40s or 50s whose 75- or 80-year-old parents are going through all sorts of money for long term care, and often it is the kids writing the checks," says Brown.
"What I'm hearing more from people now," echoes Hurst, principal at Wealth Preservation Strategies in Indianapolis, "are the stories: Mom and dad own a [long term care insurance] policy or a parent is needing care right now and they see how expensive it is."
From the seller's perspective, meanwhile, more advisors and producers have discovered that the messages that tend to appeal to older prospects lack resonance with younger ones. It may have taken them awhile, but advisors have learned to tailor their messages specifically so that younger prospects understand LTCI is a product they may need well before retirement. "Trying to sell [LTCI] just as a retirement protection product or just on the basis of it being cheaper for a person to buy in their 40s is stupid," says Scott A. Olson, CLTC, who sells LTCI policies primarily over the Internet via his www.LTCinsuranceshopper.com site. "You want to set it up as a product a person could need tomorrow. Stress that the reason to buy it sooner rather than later is because they may need to make a claim sooner rather than later."
