by Leila Morris
In the following interview, a leading long-term care insurance marketer takes a look at the state of the industry.

California Broker: For someone who has never sold LTC insurance, it takes a lot of commitment to start. Also, a lot of times, you may be putting in a lot of work and the client doesn't get approved. Please explain why is it worthwhile to sell LTC insurance.

Slome: Your points are quite valid. But let me share a few facts and a direction that will benefit most agents who don't want to go through the effort. The fact is that about 80% of all long-term care insurance policies are sold by incidental producers who sell anywhere from one to four policies. They are generally selling to their own clients with whom they have a trusted relationship. They believe it is better to have their clients buy from them than risk having them buy from someone else. What I'd recommend is that agents find a local long-term care insurance specialist in their area who will be willing to split a case. You bring them the prospect; let them do the work and the selling; and you share in the commission. It truly is a win-win situation. A percentage of something is better than 100% of nothing.

California Broker: Many life insurance policies have LTC riders. Why is it better to buy a separate LTC policy?

Slome: Who said it's better? Each have different pros and cons and each have different suitability. A life+LTC combo product can be especially well suited for an individual who might not favor the ongoing premiums for traditional LTC insurance. They may have sufficient assets to make what is essentially an asset transfer.

California Broker: Do you see any trends with new products and features?

Slome: Certainly more people are buying limited duration policies. They are significantly more affordable and, in most cases, will provide sufficient protection for the vast majority of policyholders. You have a very attractive option when you couple a limited-pay policy with a shared-care benefit in which either spouse can tap the other's benefits. All the trends today are clearly the result of the need to make coverage affordable to as many people as possible. One of the most expensive options is the compound inflation option, which can double or triple the cost of a base plan of protection. Thus, you are seeing more interest in growth options tied to the Consumer price Index. This is a way to make coverage more affordable. And lower cost equates to more interest and sales.

California Broker: What are some of the opportunities today in selling worksite LTC policies?

Slome: Everybody is excited about worksite long-term care insurance and certainly we are witnessing growth in the marketplace. But that said, the average producer who isn't selling to companies is not likely to walk into a 50- or 100-life company and secure their long-term care insurance business. That is, unless they have a relative who is the decision maker and even then, they had better team up with someone who knows how to effectively install a new plan. That said, for the average individual producer, there is an opportunity. That's the small business with under 20 employees. A few insurers are now offering multi-life discounts to companies with as few as three employees. Others will focus on companies with 10 people and, in addition to discounts; some may offer nominal health concessions. This is the real opportunity for producers as there is less competition and lots of opportunity.

California Broker: Where do most agents get their LTC insurance sales leads?

Slome: Leads are always the number one thing agents look for. Direct mail still works, but it requires a significant ongoing financial commitment. I have to say that we are seeing an enormous increase in the number of consumers who are looking online to find a local long-term care insurance agent. Traffic to our website has doubled in the past 12 months and over 70% of that is from consumers looking for information. If you haven't started a process of getting a presence online, you may find yourself behind the eight ball in the years ahead.

California Broker: How has the economy affected the LTC insurance market and what effect will a recovering economy have on LTC insurance sales?

Slome: Certainly the weaker economy has impacted sales. That said, a number of insurance agents, who are focused on LTC insurance, are having great years. And many are finding financial planners who are advising their clients that they no longer have sufficient funds to pay for care and, as a result, insurance is worth considering. Consumers understand that they are facing a risk. What one has to explain is that affordable options exist and that, without long-term care insurance, you and your family are bearing 100% of the risk. A weaker economy doesn't change the risk and people understand that. Plus, the tax deductibility has become even more attractive to small business owners.

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