Huge Opportunity Exists In LTC Marketplace For Trained, Savvy Agents

By John Wane | March 21, 2005

You may have read about a recent survey–the LTC IQ test–that over 60 percent of respondents failed. Almost 90 percent knew what long-term care was, but over 40 percent thought the government would provide coverage for it through Medicare or Medicaid when they retired.

The same percentage said that their Medicare Supplements and disability insurance would pay for their LTC expense. All are basically not true. Bottom line, more than 60 percent of adult Americans may not be well enough informed to make intelligent decisions about their future LTC needs.

When you consider that only about 9 million long-term care insurance policies have been sold over the years, according to AARP, that leaves over 100 million seniors and boomers, plus millions of a younger age, without the needed coverage, based on U.S. Census Bureau data. From these statistics, it is apparent there is a huge void in the LTC market that needs to be filled. The problem is there are not enough well informed agents and brokers in the field today to reach all of these people.

What keeps many agents and brokers from becoming active in this largely untapped market is their unfamiliarity with LTC products, the marketplace, and their belief that they have neither the time nor staff to expand their horizons.

The problem becomes even more apparent when you consider that many property/casualty agents, while cross-selling life and health products, resist selling LTC insurance, thereby missing an opportunity to add to their commission and renewal income on an ongoing basis. This is a sad irony since so many P/C marketers are looking for just the right life or health product to add to their portfolio in order to improve their bottom line–and it’s right before them in the form of LTC insurance.

We would strongly urge those not already offering LTC insurance to realize that prospects for the coverage are all around them, beginning with their individual and group client base. They might also improve their chances for ongoing success by forming an alliance with CPAs and financial services organizations, since many of them have clients who–although they may not realize it–need LTC insurance.

LTC insurance is the product of the 21st Century–one of the most important insurance products that you can offer to this and coming generations. If you don’t, others will, at your expense.

The market is certainly there. And while we long ago realized that each presentation concludes in a one-on-one sale because of the different needs of prospective insureds, we have employed many different marketing methods to get there. A favorite is worksite marketing.

This surge in sales shows all signs of continuing. One of the main reasons for this is that we strongly convey to both employers and employees the consequences they could face without long-term care coverage: the employer’s production could suffer when employees are absent from the workforce in order to become part time and full time caregivers. This often happens when a parent or grandparent has a catastrophic illness or is the victim of a major accident and needs long-term care.

Our research revealed that 40 percent of the disabled requiring long-term care are between the ages of 18 and 64, and that one in four Americans is a caretaker.

These facts are startling for both employers and employees, as is the mention that long-term care is not covered by their individual or group health insurance policy. They will usually be even more shocked to learn that Medicare and Medicare supplements do not cover long-term care, either, and that Medicaid–while it does cover some LTC expense–is a welfare program, and thus it is unlikely that they’d qualify for the coverage.

These stunning doses of realism are awakening employers and employees alike to the need for LTC coverage. It has been our experience that not only are boomers and those of a younger age within the workforce signing up for the coverage, they’re explaining the need for it to their parents and grandparents.

So, if you’re not already marketing LTC insurance–which we strongly encourage you to do–but may be thinking about it, the workplace offers you some great opportunities. Employers naturally don’t want to lose valuable employees and see their production suffer. Likewise, employees don’t want to give up their jobs and careers to become a caregiver. The market for LTC insurance will continue to grow because, on average, Americans are living much longer due to medical breakthroughs.

The LTC industry must do a much better job of reaching and educating the majority of Americans who may be seriously at risk. The fact that they could be facing economic and emotional distress in the future will motivate many of them to buy.

For those who remain unconvinced, you can mention that the Health Insurance Association of America and New England Journal of Medicine have reported that almost one in two Americans can expect to spend some time in a nursing home. Then, explain that the average cost of a year in a nursing home currently runs $62,000, and often double that total in major metropolitan areas. Home care can cost as much, or more, than a nursing home. And these costs will continue to increase rapidly. You should also emphasize that due to medical advances, the chance of spending time in a nursing home is growing slimmer as more people are turning to alternatives such as care at home, in assisted living facilities, and adult day care centers. LTC insurance will often cover these expenses, too.

Inform your prospects that today’s LTC policies have benefits and features unheard of a few years ago and new innovations are continually being added by carriers currently offering long-term care insurance. Inflation safeguards can be written into many of the plans, as well as stipulations that will assure an income to the surviving spouse upon death of the insured.

It’s up to agents and brokers to inform prospects of the many LTC insurance choices available to them that can be tailored to meet specific needs. Whether you personally sell the product or enter into a shared commission arrangement with an organization with expertise in long-term care insurance, your bottom line will be better tomorrow than it is today.

John Wane is president of American Independent Marketing, Yakima, Wash. He can be reached at (800) 672-7202 or info@golden-
care.com. Lenny Anderson is president of GoldenCare USA Inc. in Plymouth, Minn. He can be reached at (800) 842-7799 or lga@goldencare.com.

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