Brokers Selling Long-Term Care Insurance Today
How easy is it for a broker who specializes in non-long term care insurance products to sell long term care insurance today? Not easy. It used to be a simpler process. First, the carrier’s products were all similar. They could easily be spread-sheeted, and even a broker who only sold a couple of policies per year could choose the least expensive option, assuming he or she approved of the carrier. But the last two years have seen increasing variations of structures in long term care insurance. What appears to be the least expensive option on a spreadsheet today may in fact not be the best value.
In addition, there are simpler products, but there are also products which have many moving parts which the occasional broker is not able to learn quickly. The most obvious example is the new John Hancock Performance LTC with its variable premiums and flex credits. Another permutation is the Mutual of Omaha Custom Solution LTC with the ability to vary the inflation percentage over the life of the contract.
With increasingly tighter underwriting, the broker is challenged to understand whether a prospect with mild health conditions will be offered long term care insurance. The broker does not have the underwriter relationships that a career agent has, and is less adept at obtaining pre-underwriting recommendations.
Finally, the long term care insurance sale has become a more lengthy process. This is mainly due to the increases over the years in premium, so that the buying decision is more carefully considered by the client. This opens up the issues of premium increases, carrier trustworthiness, and claims adjudication which are reasonable questions for the prospect to ask. These issues become objections and require that the broker have the knowledge and confidence to overcome them.
So the process is a far more complex one than heretofore. How can the broker still be effective in selling LTCI? By permitting a LTCI expert to assist him or her in the presentation.
This is easy to do at Northstar. We have licensed representatives who can be a part of the presentation, either by phone or via computer screen-sharing. This is a part of the service we provide, with no commission cut to the broker.
The broker controls his or her relationship with the client and enforces that relationship by teaming up with our folks. The broker can be the main presenter and has a backstop for any questions or objections that may arise. This makes the presentation far easier. The broker doesn’t have to worry that he or she may not be able to answer a question or overcome an objection.
Northstar offers this service all the time, and we want to help. We have found that sending a broker a quote does not result in an application. In fact, we recently sent out 250 quotes in one month, and less than 3 % of these opportunities resulted in applications. What a wasted effort, both on our part and on the part of the brokers involved.
So why aren’t more brokers willing to utilize our skills? Brokers are independent souls. They believe that they are intelligent and can quickly understand the nuances of the products. They feel threatened by involving another person in the sale despite the fact that that person has no way to steal their client, that there is no commission sharing. They believe that they can be effective despite a general lack of confidence in selling long term care insurance.
The result of this mindset is that a broker will not be very successful in selling long term care insurance.
So what are you waiting for? The key to success is adapting to changing conditions. Don’t just ask for a quote, send it to your client, and think that the client will apply. Adapt, get in touch today and receive the help you need, and you will be far more successful in selling long term care insurance.