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Avoiding the LTCI Crisis: How to Sell to Younger Clients

Author: Frank Darras

Remember when you were young and invincible? We were bullet-proof, healed in an hour, and would try just about anything at least once. As we enter our 40s, however, we start thinking about our twilight years. Most of us wonder: “Will I be healthy? How much do I need to put away to be safe? Will I be financially sound?” We start to play “what if” games in our heads.

  • What if I suffer from chronic illness or injury and need long-term assistance?
  • What if I want to remain independent and receive help with activities of daily living in my own home?
  • What if I live to be 100 and can’t make ends meet for my health care needs?
  • What if I get dementia or early onset Alzheimer’s and need a senior center to keep me safe while my spouse works during the day?

Nobody wants to dwell on the idea of outliving their nest egg or relying on a broken health care or Social Security system that may not be there when we need it most. These are real life scenarios that can keep clients up at night. “What if, as I’m growing older, I’m not healthy? What if I have an accident? Where will the assistance come from, and how much will it cost?”

Your selling opportunity is the chance to explain to your prospective customers that leaving these answers to chance may be a risk they cannot afford to take. Each year, 7 to 10 million seniors have their care managed by a friend or a relative because they can’t afford professional long term care. Ask any senior if they have a fear of being a burden to their loved ones – a fear of growing old and dependent.

Communicating with your client

Here are some suggestions of questions you might ask your customers: Do they want to rely on family and friends to care for them when they grow old and can’t care for themselves? Why do so many people avoid buying long term care insurance when they are young and the cost is cheap? We don’t think twice about health, life, homeowners, or auto insurance – but how many of us are protecting our own independence as we age?

The facts are:

  • Most seniors understand the value of long term care, but by the time they apply, it is expensive; in some cases, depending on their health, they might not be underwritten at all.
  • Long term care costs are rising.
  • In-home care is approximately $30,000 per year, assisted living $40,000 per year, and good nursing home care at least $70,000 per year.
  • The average time frame for long term care is 2.5 to 2.8 years.
  • The average stay in a nursing home would cost $200,000 today – what will it cost 20 years from now?

All of this means that long term care could be the crisis of the 21 st century.

In this economy, most people are reluctant to spend more money on insurance. That’s understandable, but waiting for the economy to get better provides no peace of mind of financial security. Someone who purchases long term care insurance in their early 50s can get decent coverage for as little as $110 per month. If they wait until they’re in their early 70s, they’re looking at approximately $525 per month. That’s a huge difference in cost. Explain the advantages of signing up while they are young, so that your clients get the advantages and lock in their coverage while they are relatively healthy and earning a good income.

A few things for clients to consider

Long term care policies come in all shapes and sizes. Choose a company you trust and believe in, and that has a good, solid claims-paying history. Questions to ask include: How many premium rate increases has the company had in the last 10 years? Does the client need inflation protection to keep pace with rising costs? What daily, monthly, or annual benefit amount will offer solid protection without driving them into the premium-paying poorhouse? Does the client need or want in-home care, assisted living, or senior center services – and does the care need to be authorized with a written, carrier-approved plan of care before services begin?

When your clients buy long term care insurance earlier rather than later, while they are still healthy and without major medical issues, they can lock in a lower initial premium and keep rates lower. So, encourage your customers to stop procrastinating and get busy securing their future health and financial stability. Tell them to stop all that worrying about getting old, take action – and then get some sleep.

DarrasLaw is Americas' most honored and decorated disability litigation firm in the country. Mr. Darras has seen more, evaluated more, litigated more, and resolved more individual and group long term disability and long-term care cases than any other lawyer in the United States.

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