Unique marketing strategies combined with creative ways of financing policy premiums can win new long-term care insurance sales, according to experts speaking at Canada's first Long-Term Care Conference organized by Munich Re and held in Mississauga this fall.
During one conference session, entitled Producer Panel: Prospecting and Sales Techniques From Your Peers, four living benefits veterans shared their techniques for selling long-term care insurance (LTC) policies and financing the premiums.
Elliott Levine, Director of Toronto-based Levine Financial Group drew a comparison to buying LTC and grocery shopping. Mr. Levine, who has qualified as a member of the Top of the Table with the Million Dollar Round Table since 2004, explained that most people go grocery shopping with a list of items, but return home with additional purchases over and above those on the list. "That's how our practice sells long-term care insurance," he said, explaining that while he bases his practice on disability insurance (DI) and critical illness insurance (CI), he introduces the idea of LTC while settling a DI or CI sale.
"The client only thinks he's buying one or two things. We walk out with five or six things - more than they had originally anticipated buying." He added, "Our closing numbers are extremely high...and the number of apps we come back with for people who we weren't expecting to sell long term care to, are also very high."
Critical illness insurance declines offer another source of LTC sales for Mr. Levine. When the insurer declines a CI policy application, he automatically proposes a LTC policy, reasoning that the client had been prepared to pay premiums for the CI policy. "If the decline was willing to write me a cheque, I'm going to get a cheque. The only question is what's the cheque going to be for," he said. "If I can't get them DI or CI, I'm going to get them LTC most of the time."
Presenting clients with statistics related to illness or disability rarely works as an LTC marketing strategy, according to panel participants. "Statistics never work. Everyone knows that there's a 100% chance that everyone's going to die in this room and there's a pretty good chance we're all going to get sick," said Mark Halpern, a nineteen-year veteran of financial planning and President of Markham-based illnessPROTECTION.com Inc.
In one exception, ‘logical' statistics may become useful, said Jennifer Jacobs, a Sun Life Financial advisor, who defined logical statistics as those to which individuals will answer ‘Yes'.
"With long-term care you can generally just say to someone, ‘We know you're not going to live to a hundred doing jumping jacks and 99% of people...answer in the affirmative," she said. "So they've already sold themselves right off the bat."
Evoking connections with friends and family works better than statistics, said Mr. Levine. When meeting with clients, he asks about friends and family and usually finds that an individual knows someone who has had a heart attack, stroke or cancer. That allows him to tie in CI, DI and LTC.
More aggressive advisor advocacy of LTC will help sales, according to Mr. Halpern. "We're not selling enough LTC here and it's not because we don't' have a great product," he added. "The challenge is that nobody's going out to speak to their clients and offering this product and positioning it in a way that really does help the client."
Timing looms large in LTC strategies for Terry Zavitz, a 26-year veteran of financial services and President of London-based Zavitz Insurance Inc. When clients holding DI policies reach approximately 50 years of age, she broaches the idea of making a transition from DI to LTC, explaining that retirement means shifting from protection of income to protection of assets. She suggests to them that making a transition at about age 50 will mean lower premiums than when they reach 65 years of age.
"So therefore, you're just transitioning your disability to your long-term care, but not dropping your disability in order to get your long term care - just positioning it differently," she said.
That transition may also help in funding LTC premiums according to Mr. Halpern. "I've had people with disability policies who are close to 65 and they're still paying for a policy they're never going to see any benefit from," he said. Those aged 55 years or more may not collect on long-term disability policies and should consider LTC coverage, he added.
Using government money tops Mr. Levine's list of payment strategies and may mean that the client does not have to cut a CI policy to pay premiums on a LTC policy. Some clients pay their LTC premiums out of available money until they turn 65 years of age and then use their Canada Pension Plan payments, he said, adding that in such cases he constructs a policy in which the premium more or less equals the CPP payment. "If they're 60, they're going to pay the premium for five years. After that, the government pays for it," he said.
As another source of premium funding, high net worth clients may be persuaded to increase payouts from Registered Retirement Savings Plans or Registered Retirement Income Funds to pay for their LTC coverage, Mr. Halpern suggested.