While I do believe that the best days of long-term care insurance sales success are in sight, I look back on the period between 1997 and 2003 as a Golden Age in the sense that LTCi came out of the senior supplement shadows and the corporate carve-out sale burst onto the scene. Long-term care insurance emerged from a kitchen table sale focused on 68 year olds to a corporate board room decision emphasizing wise insurance planning. With the advent of tax deductible premiums, tax free benefits and limited pay programs smart business owners took advantage of a tax benefit the size of Alaska.
Changing demographics, adjustments in long-term care insurance pricing practices and more difficult underwriting beginning in 2004 turned many producers away from LTCi and they migrated to term life, annuities and Medicare Advantage products. Let?s face it, why fight the fight when familiar or transactional sales are more easily at hand. As sales plummeted, some insurance carriers began looking at worksite and or the small group market as the next great frontier of long-term care insurance sales.
The notion of working the worksite or group long-term care insurance market doesn?t appeal to all the people. Financial planners and those specializing in individual life insurance and estate planning do not see themselves in the group business. Medical insurance producers struggle with adding new lines of business to their existing group clients because of the price increases and the ever changing complexity of their core business. In many regards, those of us who consider ourselves ?marketers? miss the forest for the trees. The simple fact is that the small group or multi-life LTCi sale is not a group sale at all; it is merely the logical next step from the corporate carve-outs of days past.
In the first era of the corporate carve-out sale, most agents settled for writing a policy on Mr. or Ms. ?Big?. If they had a partner and they each had a spouse so much the better. For the most part, the premiums were tax deductible and the benefits always tax free. If the broker tried to get the owners to purchase something on a key employee or two, the response was usually negative. The corporate carve-out sale, above all else, was all about the business owner.
Now that multi-life long-term care insurance is upon us, we can provide small business owners, with as few as three covered employees, simplified issue top quality long-term care insurance at discounted rates. The advantage is in the underwriting. No more waiting months for an attending physician?s statement and a problematic underwriting decision. If the employer and other covered employees can answer ?NO? to a short list of questions, they will have their policies in a matter of weeks. Commissions follow closely behind.
And owners can still lavish themselves with significant benefits while providing a few selected covered employees with a lower cost core program. This is not group insurance so the employer can determine eligible classes for coverage. The key is THREE! With this requirement met, the agent has a world of possibilities before them. The financial planner/life insurance agent only interested in the owner and maybe one or two key employees can stop here. The group producer can go forward and offer discounted individual long-term care insurance policies to the rest of the employees, also on a simplified issue basis. At 10 covered lives, one carrier will offer simplified issue on spouses as well.
Simplification is primary. With ?NO? answers to the simplified health questions, the agent doesn?t have to sweat a decline which could create difficulties with their important client. Depending on the broker?s focus, the multi-life sale becomes either an extension of the benefit program that they have built and managed for their employer group and or much needed retirement income protection for their individual client. Either way, multi-life, simplified issue long-term care insurance is the shortest distance between two points, creating valuable asset and income security for your clients and multiple streams of vested renewal commissions for the agent.
Call us today to see how easy and profitable multi-life long-term care insurance really is. You don?t need to be a LTCi expert to help yourself and your clients.
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