by Leila Morris
In the following interview, a leading long-term care insurance marketer explains why agents are missing out on long-term care sales and why it matters.

1. Why aren’t more people selling LTC insurance?
Jesse R. Slome: Getting consumers to buy LTC coverage is not the biggest frustration. The biggest frustration is convincing the agent to make it part of their portfolio. Some producers gave up on selling long-term care insurance several years ago. They don’t understand how significantly the industry has changed since then. Older policies were harder to sell and they lacked the attributes of today’s policies. Then there is the category of agents who have yet to sell a policy. They are stuck in assumptions that LTC insurance is hard to sell and that underwriting is hard. Some agents are willing to learn what is happening in the industry, while some are just doing business a usual. It is similar to when many agents refused to learn about variable annuities when they came out. I can’t imagine basing a business on just selling fixed annuities.

2. How do you get started if you have never sold long-term care insurance?
Jesse R. Slome: You may have to stumble a little on a few sales or you can partner with an LTC specialist until you know enough to do it yourself. The American Association for Long-Term Care is offering free training to help agents get off the ground. The 2008 California Long Term Sales Success Symposium is being held May 6 in Los Angeles and May 7 in San Diego.

3. What is your main argument for selling LTC products?
Jesse R. Slome: Today, there is a much more positive environment for these products. Media is giving enormous positive exposure to the need for consumes to plan for the possibility of needing long-term care. The federal government is also urging consumers to plan. Consumers are getting the message. For the first time, we are seeing consumers walking into the offices of financial professionals holding articles about long-term care insurance and asking what they should do. An agent has three choices when it comes to long-term care insurance:
1. Say you don’t need to offer this product and your
    client may find someone else to buy from.
2. Partner with an LTC expert.
3. Attempt to sell it yourself.
    The vast majority of producers, who sell LTC insurance, sell from one to six policies a year and they are not specialists. That percentage continues to grow. LTC has entered the mainstream of insurance products. It is no longer a retirement or post retirement sale. It is now part of pre-retirement and business benefits sale. In the year 2000, the average applicant for LTC insurance was 67. That number has dropped to 57 in 2007, according to our study. That is seismic shift. The average age of individual buyers is 57. Sixty-three percent of group buyers are under 55. Eight million people now have LTC insurance. Also, 400,000 bought individual or group coverage in 2007 alone and most did not buy from the agent they already had a relationship with. Clients in their 50s are starting to think about LTC insurance. If you don’t offer it, your client may partner with someone else. Remember that all the other insurance you have with that client is renewable and can move to another agent.

4. What are some of the misunderstandings that clients have about the product?
Jesse R. Slome: Consumers assume that coverage is very expensive. The old way was to sell clients more coverage than they were prepared to buy or would probably ever need.
The second misperception is, “Why spend money today for something I won’t need for many years.” This attitude changes when consumers understand that their health determines what they will pay and whether they will qualify. At 30, it is possible to be in better health than you were in your 20s. But, most likely, you won’t be healthier at 65 than at 55. The best you can hope for is to have the same level of health. Consumers need to understand that they may lose discounts when they don’t apply at younger ages. We have published our annual price index that shows how affordable LTC insurance can be when you are eligible for discounts.

5. Do you provide educational materials to clients before or during a presentation?
Jesse R. Slome: It varies. If you think about it, the sale at the worksite is made in 20 minutes, but the sale in the home takes longer. The fact that most consumers do a lot of research online shortens the sales process. Stockbrokers, financial planners, and representatives at the bank are not spending two hours with the client to make a sale. That is old world think. If you look at where sales are gong, LTC insurance will become much more of a commodity. Consumers want the facts and a quick spreadsheet.

6. Who are the best prospects for LTC Insurance?
Jesse R. Slome: Anybody who has bought insurance is ahead of the game. Those who have individual insurance understand insurance and have some savings and wealth. For example, an annuity buyer is a likely prospect. Agents used to sell only heavily loaded LTC coverage to affluent people. But most people can get by with a shorter duration of insurance. With state and fed governments being strapped for money, it is very clear that government will not provide universal long-term care and even if they do, it will not be of the quality that people want. Those who understand quality and choice are the ones who will buy it.

7. How do you deal with the possibility that your clients won’t qualify for the coverage?
Jesse R. Slome: The number of applications being approved for underwriting is increasing, partly because many of today’s applicants are younger. They key is to understand the rules and not waste your time on prospects who are not likely to qualify. You should explain to clients that their good health determines how much they will pay, whether discounts apply, and whether they can get it at all. Ask them the simple knockout questions. Just say to the client over the phone, “I have to ask you these questions to find out whether your application is likely to be accepted.” With gas at $3 a gallon, I am not going to drive to a client who won’t qualify. Too many agents look for the easy sale. They want the client who will walk in and say, “I am here with a check and the application.” Compensation is commensurate with amount of work. LTC is not for every agent to sell.

8. If some life insurance policies have LTC riders, why is a separate LTC policy necessary?
Jesse R. Slome: You get what you pay for and LTC insurance is the most affordable way to protect against the risk of needing long-term care. There will continue to be growing interest in annuity and life products that pay long-term care benefits and sales of these combo products will grow in the years ahead.  But for the vast majority of an agent's clients who are in good health and eligible for such savings as spousal discounts, traditional LTC insurance is the way to go. 

9. How popular is group LTC compared to individual LTC.
Jesse R. Slome: Group sales are growing faster as a percentage, but the individual market makes up the largest component of the market. You see a lot of multi-life sales with small employers using individual policies.

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