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Long Term Care & Disability Publications
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for PROFESSIONAL ADVISORS (Getting Beyond The Fancy Brochures) "COUNSELOR" SELLING When I first heard the term "counselor" selling, it instantly appealed to me. My preference has always been to consider myself an "advisor". My goal has always been to present my prospects with enough information to make their own decisions. I wanted my expertise and counsel to provide the 'value added' to motivate my prospect to action. When I personally purchase certain things, I sense my own hesitancy to buy when I feel a salesman is looking to sell me an item without addressing my concerns. They're selling product, not solutions. The most effective client presentations are those with an active dialogue of "give and take". We're actively participating in a conversation where we're communicating directly with each other. We're not "selling at" but sitting on our prospects side of the table, helping them to solve their problem. This has been termed "counselor" or "consultative selling". Our level of success will frequently be dependent upon our prospects actively participating with us. Asking "good" questions is the ideal way to obtain "buy in" to the concepts we've presented. Two main types of probing questions are "open" and "closed". An example of an "open" question might be "would you share with me your understanding of how long term care insurance works?" Or "would you share with me your long term care experiences, either positive or negative?" An "open" question opens up the conversation into a discussion. Conversely, a "closed" probe requires a specific answer. Examples might be "has anyone in your family required long term care, either at home or in a facility"? Or "are you interested in hearing more about how long term care insurance fits your situation"? Let's proceed with technique on utilizing "counselor" selling with Long Term Care Insurance. Daily Benefit "When creating a long term care plan for clients, we usually begin by reviewing the current cost of care in our part of the country. Based on the recent studies we estimate that $200/day is the current average cost nationally. For illustrative purposes, for this part of the country, let's use $200/day. Is that ok?" If $200/day is the right amount, the next question in our review process is the waiting period before benefits begin. "If either of you needed care at home, when would you want benefits to begin? After 30 days, or 60 days, or 90 days?" "Do you feel it's more important to have a longer/shorter duration of benefits or 50% or 75% or 100% for home health care?" It becomes their long term care program (not ours). "We suggest looking at LTCI as you would other coverage's with copays and a deductible. We don't think about auto insurance or medical coverage's with benefits starting with the 1st dollar as it would be just too expensive even if it was offered." "Can you afford to self insure for some period of time or have all your assets already been directed via your estate plan/will to your family? Or, regardless of whether you have assets you could utilize, would you prefer to fully insure the LTC risk? Or, would you like to explore a "menu" of various alternatives?" From: Elder Care Survival Toolbox - When to use an "in between" inflation option In helping counsel prospects on purchasing Long Term Care Insurance, there can be a tendency to decide which one (simple vs. compound inflation) is better. Do we select the $3,024 premium for 5% simple or $3,639 for 5% compound? Do we spend 20% more for compound when it'll take 12+ years for compound to significantly surpass simple? The selection of simple vs. compound inflation may end up positioning one better then the other. My contention is it shouldn t be an either/or decision. Does spending less for simple "devalue" the benefits of compound over the "long haul" (20-30 years)? Some LTC insurers have recently begun marketing compound inflation options of less than 5% (e.g. 2.5%, 3%, etc.) for the first time. It makes sense. Note the following comparison: GROWTH IN DAILY AND MAXIMUM BENEFITS Assumes Starting point of $300 Per Day for 3 Years (1,095 Days)
If our prospect is in good health today, as they need to be to qualify for coverage; it's unlikely they'll need care for at least 20 years. Instead of positioning simple vs. compound, note that the premium for 3.5% compound is comparable to 5% simple. Therefore, in 20 years, refer to Elder Care Survival Toolbox From: Elder Care Survival Toolbox - The "old school" KISS formula leads to present day success SHARED CARE/"POOL OF MONEY" MODULE CLIENT PRESENTATION A lifetime duration with compound inflation Long Term Care Insurance plan would always be my recommendation if the cost was readily affordable by most people. Unfortunately, based on my experiences, it's not. My dilemma comes from the obligation I feel to recommend the best Long Term Care Insurance program to everyone. I would never want a client to ask me why I didn't recommend the "best" LTCI plan when their spouse had just been diagnosed with Alzheimer's. The other dilemma I'm faced with is that of education. My prospect needs to first understand a multitude of factors (e.g. Medicare does not cover long-term care beyond 100 days, the DRA of 2005 "destroyed" spend downs as we knew them, there's a high likelihood (72% chance) of needing care after age 65, etc, etc.) Point being, for most people, we end up presenting an enormous amount of new information in a very short period of time. We do this to get them in the frame of mind necessary to consider the purchase of Long Term Care Insurance. We sometimes forget the extent of the amount of new information we're presenting without an awareness that "we're losing them". Don't ever assume your prospect understands and remembers every idea you're presenting. Many of our prospects have already accumulated a pile of Long Term Care Insurance proposals. They continue to shop and try to compare as they feel the need to make a long-term perfect decision. Usually, I believe the more they research, the more confused they become. In the recent 'GE STAT' study, 99 percent of those that responded said that long term care insurance needed to be simplified. Moreover, over 46 percent felt that insurance company promotional materials are too confusing, not informative enough or too boring. Therefore, I simplify my Long Term Care Insurance recommendation(s) as much as possible. I believe the more we present, the more we add to the confusion. This is how I arrived at my belief in the SHARED CARE/"POOL OF MONEY" client approach. My background in the employee benefits business prompts me to seek out the "best for the most". In other words, we can't insure everything so how do I make a recommendation that will satisfy the needs of most (not all) people? At the same time, I need to "balance" the benefits with a reasonable cost so the employer can satisfy the needs of most (not all) of their employees. To continue, for illustrative purposes, let's propose a $6,000 per month benefit....refer to Elder Care Survival Toolbox A Future Value illustration comparing "Benefit Pools" 
A Future Value "visual" illustration 
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