Does Property Causualty and Long Term Care Insurance Go Together?

[pcdaugs]

Hello All,

I would like to get some of your feed back as P&C agents. I work for a firm in MN called Newman Long Term Care. My primary job is to recruit and train P&C Agents, Financial Planners, CPA to work with us to bring Long Term Care Insurance to their clients. As you can image I spend a lot of my time cold calling on folks such as yourself and as of yet I have not found a message that resonates with P&C agent unless I meeting them in person at the local Big I chapter. Anyway, I would like your input as to what might be the correct language to explain what our firm has to offer. Below I have described in further detail what we do, thanks for your all your help in advance!

Newman Long Term Care is a third party marketing origination or MGA that solely focuses on Long Term Care Solutions (i.e. Traditional LTCI and Linked or Asset based LTCI). We have two channels for agents to work through including our full service brokerage and our Business Alliance Program. At our brokerage you can obtain quotes, sales tips & strategies, health underwriting advice and clear explanations of all of the LTCI riders.

Our Business Alliance Program offers the ability to work with a LTC specialist that works for Newman LTC and only sells LTC solutions. In this program, we help our agents build awareness of LTC planning with their clients, train the agents how to have a 10 minute LTC conversation for referral to LTC specialist. Once our specialists get a name and phone number from the referring agent they do a through pre-screen underwriting, meeting client, take applications, move them through underwriting, and deliver the policies. The agent that refers their clients to a specialist at Newman LTC get 50% of the street level commission for simply having a 10 minute conversation about LTC planning. This process is a little more detail then what I have explained here but this explanation should do.

Please ask me any question about what I have explained here if I have not been clear or have left out information that you believe to be important. Again, thank you in advance for all of your input!

Best Regards,

 

[djs]

As a P&C agent, I have a lot of companies trying to get me to sell my book their product. This is everything from prepaid legal to mortgage modifications, to disability insurance to long term care, and even tuppaware (okay, not really).

Most P&C agents think of this as a distraction. The typical P&C sale is pretty transactionary, a LTC sale is more involved. Most P&C agents hate selling life insurance, even if they have to, because it isn't on the same track.

You need to start breaking down P&C agents. Some are restricted by contract on adding random products to their offering. Some (most?) focus on the transaction of the sale, more than a true relationship. Others, who offer financial products, probably work on a relationship basis a bit more. Yes, I'm way over generalizing, but you should get the point.

I'm guessing you'll need to focus on agencies that already do more than just auto/home insurance. You need to find the ones that make their mark by being the insurance 'guru' for their clients.

Personally, I steer clear of LTC because I don't have time to learn it enough to do it well. I've referred out a few cases where people were looking for the coverage, but that is pretty rare.

The other problem you have is if I schedule a half hour meeting with a client, I have 45 minutes of stuff to squeeze in. I'm not looking to try to squeeze more in, which means it waits for the next review cycle.

Dan

 

[pcdaugs]

Hello Dan,

Thanks for your reply. I am intrigued by your answer, that the majority of P&C agents are focused primarily on auto and home and are not concerned about doing anything else. I was under the impression that the majority of independent insurance agents wanted to get as many hooks as they possibly could into their clients to make sure they were clients for life allowing for retention of renewal income, or trails. To that end is the concept of a relationship curve a poor or good example of the goal of most P&C agents? The relationship curve meaning the more different type of insurance you sold your clients the better your relationship is. In other words, if one client has an auto and home owners policy they are not as good a customer as one who has auto, home, umbrella, and life policies.

Also, your answer makes me wonder at what kind of income is your typical or average P&C agent making in a year? I would think that they would still be interested in additional 10-15% raise in income based on working with a specialist who not only knows the product but has a 70% closing ratio. What are your thoughts?

Thanks Again Dan,

 

[djs]

My answer was more based on the fact that I see a few different style agents out there. For the most part, they fit neatly into buckets. You have to figure out how to categorize them.

Bucket 1 - Agents who focus on the transaction sale. They will say they want to cross sell, but rarely do. Average policies per household is less than 2.

Bucket 2 - Agents who focus on the client rather than the transaction, but stay within their domain. If they don't sell it, they don't talk about it. Relationships are tough. The agent could be doing very well though.

Bucket 3 - Agents who focus on the total needs of their clients. They will gladly refer clients to others if the need arises. Usually not much of a control freak. Most agents fit into this category in noncompetitive things, like needing an electrician. Few fit into this category when it comes to other insurance sales.

I wish I had a dollar for everytime I heard the 10-20% increase in income line (okay, I do have a dollar, but not much more). The truth is, almost any agent can get this raise just by asking their existing clients the right questions.

Onward rambling....

All P&C agents say they want a relationship with their clients. We are bred this way. Unfortunately, few truly develop this, and a lot of clients don't want more than a transactionary relationship.

Most P&C agents worry about presenting to much to the client, not to little. If this wasn't the case, they would make more money because they would ask more questions. You will run into this.

P&C agents treat their clients like a gold-mine. It's hard to let other miners come onto your land to dig for gold when you aren't done yet. If I understand correctly, this is what you are asking to do, squat on another agents gold-mine, for a fee of some sort.

This is why, in my opinion, agents that offer financial services will be more open to presenting long term care to their clients. It's part of the financial services profile, and ties in very well. Many will already offer long term care because of this. Others won't, because they don't have the expertise.

On the other range of the spectrum, you have agents who advertise 'low-downpayments' and 'instant SR-22s'. These agents do a high volume of business, but probably don't attract the right type of client for you.

Bottom line, not all P&C agents are the same. Most, despite what they say, make $50K - $75K a year and are transaction based. You want the other ones (which there are still a lot of, just learn to sort).

Dan

 

[pcdaugs]

Hello Dan,

Thanks again for having this dialog with me as I have learn much from your comments. Although I still have a couple of questions that I would like cleared up. First, what do you consider a insurance agent that provides financial services? As I already focus on finding financial planners to work with. Generally, they are securies licensed and they seem to push this type of product away from them as they are interested in investments not insurance products. I guess the overall question is who owns the long term care sale or discussion? My personal opinion is that the risk managers or P&C agents would be the best advocates for an insurance product and thus it would be an easier transition for them to sell this product rather than the financial planner. Do the financial planners know how much money their clients have? Yes, but do they know how to discuss the consequences of not planning rather than risk (the potential that it could happen) to their client? No, financial planners don't want to deal with the inter-family discussion that need to take place to establish the true value of LTCI.

So my two questions were:

What do you consider an insurance agent that provides financial services?
Who should own the long term care insurance sale or territory?

Thanks Again,

 

[djs]

All I mean is the insurance companies that have signs out front:

Joe's Insurance and Financial Services
Acme Broker/Dealer

It does amaze me how many financial planners don't talk about LTC, since I believe that is where it belongs, in a true financial plan.

The insurance guy does the insurance stuff, adds in the financial services, some do it well, others maybe not.

As far as who should own the sale? I guess it's anyone who wants to. Who is the most likely person to drive the sale? Not sure. I think it belongs in the financial plan, but many financial planners skip over this. The insurance guy will help with investments / 401K rollovers, but rarely get into true financial planning.

Of course, if it was easy, with people beating down the door to sell LTC, you wouldn't be asking the question

Dan