High-profile LTCI advisors Matthew Brotherton and Debra Newman share their insights about how to be successful selling long-term care insurance in today’s environment in Part II of this exclusive interview with Insurance Forums Contributing Editor Charles K. Hirsch.
In Part I, Newman and Brotherton talked about how they built their niches in the LTC market, how they prospect and how they educate clients and prospects about long-term care insurance.
Here in Part II, we’ll examine the sales approaches of these top producers, including how they match prospects with products, and will conclude with some great advice for agents looking to expand their LTC footprint.
The LTC sales approach
Our focus now turns to what does the advisor tell the prospect once the meeting begins? Is there a particular approach – statistics, a power phrase, a real-life example, etc. – that is particularly effective in commanding attention and helping him or her understand the reasons to consider long-term care?
“Statistics tend not to work,” Newman told me. “Everywhere you look, you see the same ‘70% of people over the age of 64 are expected to need LTC at some point in their lives.’ Do we know a single person that has purchased because of that? If anything, we get people thinking they are in the 30% who will never need it. Instead, we put that same information into a more ‘real’ perspective – ‘Look across the table at your husband or wife. One of you will likely need long-term care, and the other will have to provide it. What toll could that take on them? Physically? Emotionally? Financially? Long-term care insurance can give them access to resources and funds to help make that easier.’
“LTCI is still often an emotional sale. The advisor, however, does need to provide stats and info to people to justify their purchase to others. They like to be able to provide a logical explanation (risk management, asset protection, etc.) to explain an otherwise emotional decision.
• See also: No stats in LTCI presentations!
“Think about your parents and grandparents,” Newman continued. “If you’re married, think about your spouse’s parent and grandparents. Out of those 12 people, how many needed care? Who provided it? How did it affect the family?
“I had a meeting with one of my favorite financial advisors and I asked him why he was not selling much long-term care insurance, and he said he was now selling life insurance to replace what asset would have been used during the life of the insured for their long-term care. I asked him whether he thought people would remember why they had the life insurance and would be willing to spend their bank account, IRAs, and mutual funds on care, or whether they would say, ‘I can take care of my spouse, I can do it,’ and then proceed to have their health diminish faster than the person they were caring for. I told him that by having long-term care insurance it gives them permission to hire someone to come in and deliver the care so the spouse or family member can be present in their lives but not have the guilt of being the caregiver. You can remind them that they bought the long-term care insurance while they were healthy, and they gave each other permission to hire someone! The advisor said, ‘That is the first time I’ve realized how this genuinely impacts people.’ Now he is an advocate for having a long-term care plan for his clients.”
Matthew Brotherton told me that he uncovers needs with questions in his approach. “My approach has always been to ask the prospect a series of open-ended questions to learn about their situation. I have found through the years that it’s best to let them talk rather than me talk. The questions I ask focus on their experiences with long-term care, finding out why they are interested in the product, whether they plan on depending on their family for assistance, and financially if they needed care yesterday, where the money would come from to pay for that care.”
Matching prospects with products
Because so many carriers have created the hybrid kinds of products for the long-term care market – life insurance/LTC and annuity/LTC products – I was curious as to how these advisors look at this approach to product development. According to Brotherton, “The prospects that have been more interested in the hybrid product have been widows, widowers, and single individuals. They see the value in having a long-term care policy to have access to good quality care. These prospects also want to leave a larger legacy if they do not use the death benefit for long-term care.
“Another great prospect for the hybrid product,” he said, “is someone who has an existing permanent life insurance product with some cash value. Sometimes these prospects are considering cashing in the policy or haven’t reviewed the policy in many years. I am usually able to show them a solution to exchanging the current policy for a new one with the long-term care rider, assuming they are able to be approved health wise.
“Yet another prospect is someone who has a maturing CD, who is tired of the bank CD rates, who realizes he or she needs long-term care protection, and who has other assets to use for income. The prospect typically has a higher than average annual income and net worth, has family they would like to leave a legacy for, and normally fall between ages 40 and 70.
“I explain that the product offers convenience – they have one underwriting process for both products –flexibility – all, some, or none of the death benefit can be used for long term care – and value – by having a hybrid, it’s less expensive than purchasing a separate permanent life insurance policy and a long-term care policy.”
Newman said her company does sell hybrids, “but we try to sell the need before selling the solution. If you sell the need, you can pivot to the solution that makes the most sense.
“We recently changed our tagline from ‘Long Term Care Insurance is All We Do’ to ‘Insurance Solutions for Long Term Care are All We Do.’ This allows us multiple tools to help solve many of the same needs – linked benefit products with LTCI linked to an annuity or life policy, life plus LTCI riders, short-term care, possibly even chronic/critical illness products.
“Linked solutions,” she continued, “can be a great option for the right clients. We see it working best with wealth managers and those in the banking channels, as they are best able to see someone’s full financial picture. This helps them plan for the risk management, and also shows them where available funding sources for the insurance might be – old life policies, products outside the surrender period, etc.”
Advice for breaking into the market
If you’re reading this and you’re a younger advisor who is giving some thought to committing more of your practice to long-term care, Newman has some advice to share.
“If you are not afraid to talk about LTCI, you will have opportunities that others are letting pass them buy. Research shows that 83% of buyers have not had a financial or insurance professional talk to them about insurance. They’ve had to actively seek it out on their own. Simply changing to a proactive discussion about LTC planning will open so many more doors for them,” Newman said.
“I’d recommend teaming up with an established advisor or agency that is not currently doing much LTCI. Show them how you can be their resource for LTCI, allowing them to focus on their core business while still solving their clients’ needs. LTCI renewals have a long tail,” she continued. “LTCI is one of the ‘stickiest’ products around. More than 99% of all policies sold remain on the books, and a client can’t easily move the product from one agency to another. It’s a great product to help anchor clients to you.
“Understand that LTCI can have a long buying cycle – sometimes up to seven years from them first becoming aware of care needs, to learning of planning solutions, to investigating their own options. Repeated marketing is essential as you need to be the resource that stays top of mind for when they are ready to purchase. We’ve been amazed at the number of ‘dead leads’ that have become sales five to seven years after their initial contact.
“Incorporate LTCI discussions into annual reviews,” she advised. “Remember, your elders are likely not talking about LTCI to their clients. This is your opportunity.”
Brotherton had some advice to share as well. “To do well in long-term care sales, a producer must be willing to commit to the market. Once you commit, you must then begin forming relationships with fee-based planners, CFPs, centers of influence, etc., and tell them your long-term care story. The story can consist of why you are in the marketplace, how you can help their clients, and discuss the options for long-term care planning. Finally, try to network at local groups and stress the importance of long-term care planning.”
Newman concluded, “LTC advisors need to embrace new ways of thinking about designing solutions. No one size fits all. There are no pre-packaged solutions. Listen to what your client tells you is their concern, and then design a plan to address that concern. Might it solve all of their needs? Probably not. But a 50% off coupon for care is still a better deal than paying full price. Design a smaller starter plan, and revisit it regularly, enabling them to buy-up or purchase additional coverage as their circumstances or needs allow.”
And in an echo back to how she started selling LTC, Newman said, “Among your network of family and friends, youare the trusted resource. If something happened to them, and you knew you could have helped them plan for it, how would you feel?”
Serious answers to that question have the potential to change a lot of lives.
• Read Part I of this exclusive two-part interview with noted LTCI experts Matthew Brotherton and Debra Newman by clicking here.
About the experts:
Matthew D. Brotherton, AIF, CLTC, is President of 1752 Financial in Richmond, Va. He attended Roanoke College and earned his B.S. in business administration. He and his wife, Kathryn, currently live in Richmond with their three children. Matt is active in Greater Richmond SCAN (Stop Child Abuse Now), NAIFA-Richmond, and the Richmond Alumni Chapter for Roanoke College.
Debra C. Newman, CLU, ChFC, LTCP, is a long-term care insurance industry pioneer and founder of Newman Long Term Care, one of the largest LTCI marketing organizations in the United States. Ms. Newman is a nationally known speaker, writer, advisor, and educator. She has received many honors during her 31 years in the financial services business, being named one of the top 25 Women in Business, a Five Star Wealth Manager, and one of the top ten on the Power List of Who’s Who in Long Term Care Insurance. Ms. Newman holds leadership positions in many insurance industry groups, including the Life Insurance Foundation for Education (LIFE), the National Association of Insurance and Financial Advisors (NAIFA), and the Association of Health Insurance Advisors (AHIA).
Charles K. Hirsch, CLU, is contributing editor of Insurance Forums. He is also the president of Hirsch Communications Consulting, LLC, a communications consulting operation in Florissant, Mo. For many years, Chuck was the editor and publisher of Life Insurance Selling magazine and wrote the monthly column, What’s Going On in the Life Insurance Business. From 1999 to 2008, he was the publisher of several of the leading industry magazines in the life insurance, property/casualty insurance, and mortgage markets. These days, Chuck’s firm specializes in the development and execution of many kinds of communication strategies, particularly in the financial services business.