Long term care insurance is a challenging product. It provides a solution to a relatively straightforward problem, which is the need to fund long term care. Policy features and options can be quite complex, however, and it's easy to start stressing the coverage's bells and whistles in an effort to educate and persuade potential buyers.
It's important to thoroughly understand the technical details of your preferred LTCI policies and those of your competitors. But most prospects don't need or want to hear about every facet of the coverage. They're concerned with satisfying their personal needs, and successful LTCI producers build their sales presentations around those needs, not the policies' features.
Fact-finding basics
The possibility that an applicant might be rejected by underwriting or prove unable to afford coverage makes it important to prequalify prospects. Phil Grossman, CLTC, LTCIP is a financial services representative and long-term product coordinator with MetLife in Phoenix, Ariz., who has been selling LTCI exclusively since 1997. He starts qualifying prospects during his first phone conversation by taking them through a detailed health questionnaire. "I will ask these questions 100 percent of the time to determine whether I can go to the next level," he says.
Most of Grossman's prospects come to him through referrals. They understand that he is an LTCI specialist and they usually understand that their health plays a role in obtaining the coverage. Grossman says that he encounters very little resistance from prospects when he asks them to provide their medical details. In fact, he is often able to use the medical questions to demonstrate his understanding of LTCI underwriting. "When they tell me a medication they're taking, 99 percent of the time I know why they're taking it," he says. "Now it's not like they're talking to a salesman–I've just created a different environment." Ken Story, CPCU and partner with the Gjurasic/Story Group, LLC in Seattle, Wash., also uses an initial phone interview to start identifying LTCI needs. "Many agents use appointment centers to set their appointments on the phone, and the first time that they have an opportunity to meet with the client is either in their office or in the client's home," he observes. "I used to do that but don't any longer. I have found that a phone interview is a very important part of the process. Not only for the health screening part, but it's particularly important for establishing needs. When you do meet the person, you'll have some idea of what approach you're going to take, because the needs are different for each client. It's also an opportunity to establish some common ground outside of insurance itself. For example, I ask about their work or about their hobbies. And most importantly–and I can't stress this enough– I ask if they have ever had a personal experience with long term care. And then if they have, I let them talk and talk to their heart's content."
LTCI can confuse prospective buyers, and Story encounters some prospects who require additional explanations. In those cases, it's important to step back and work on educating the prospect. "My objective on the telephone is just to get an appointment, just to get in front of them," he says. "Oftentimes the way that I do that is to explain to them that my primary role, at least initially, is to help them understand what these things are that we are talking about and to help them get a clear picture." Once prospects have that information, says Story, then you can go further in the sales process. In his experience, however, it's been much easier for him to "open up doors through education than it is to open them up through selling."
Terry Sandvold is an agent with Prudential Insurance in St. Louis Park, Minn., who incorporates LTCI fact-finding as part of a broader financial review and retirement plan. He introduces two retirement reviews: One focuses on investments and the other on risk analysis. Everyone wants to discuss investments, he says, but he stresses the additional importance of risk planning. As part of the risk analysis, he discusses the financial impact of disability and long term care. It's not a product pitch–he doesn't tell prospects they should buy the coverage at that stage. Instead, he asks them to keep an open mind while he explains the risk to them. Once they understand the risk, they can decide if they want to consider LTCI.
