Are you conducting annual reviews with at least some of your clients? The annual review, used successfully by many professionals, is not only a forum for reviewing product portfolios, protection levels and investment performance; it’s also an ideal time to educate clients.
Investing in your clients’ knowledge achieves three valuable objectives. It:
1. Establishes your expertise
2. Preempts your competitors
3. Empowers clients to make better financial decisions
The educational topic will vary by client depending on several factors including age, life stage and financial position. The topic doesn’t always have to be tied to a product. The annual review is a long-term play that leads to a well-integrated practice where your clients have more than one line of business with you and are more likely to be loyal over the long-term.
Speaking of long-term, long-term care can be a great education topic to discuss with some clients. So many people, even those who are well-informed, have little knowledge of long-term care costs, long-term care insurance, and what, if any, long-term care is covered by Medicare and Medicaid.
Here are a few facts (found in two studies by Genworth, Beyond Dollars 2013 and Cost of Care 2014) that can better inform your client about the cost of long-term care.
- Providing long-term care in the home is the favored choice for many. The national median cost for Homemaker services is $19/hour; $20/hour for Home Health Aide services. A conservation estimate for one hour of care each day 5 days a week, comes close to $5,000 a year.
- The national median monthly cost of care provided in an assisted living facility is $3,500; in a nursing home the cost of care in a semi-private room jumps to roughly $6,360.
- Based on the national median averages, the annual cost of care provided in an assisted living facility could hover around $42,000; for nursing home care $72,000.
Highlighting long-term care facts is a great way to pique your client’s interest. Many clients believe the cost of a long-term care insurance policy is expensive. And it can be. Address the silent objection directly. Acknowledge that some long-term care insurance policies can be expensive. Then, take the opportunity to highlight your expertise and continue the education process with the following five steps.
1. Share the facts about long-term care claims. For instance according to an November 2013 article in Broker World Magazine:
- 42% of claims last less than one year.
- 84% are received at home.
- 6% are in assisted living.
- Only 10% are received in a nursing facility.
2. Tell your clients that your knowledge about long-term care insurance claims helps you design a policy for them that maximizes the policy benefits and minimizes the policy premiums.
3. Ask your clients if, based on the claim statistics, they feel sufficiently protected with a policy that provides a three year benefit period. It keeps the premium affordable yet provides a reasonable period of coverage.
4. Now that you have an idea of the benefit period, introduce the daily benefit amount. Refer back to the cost of care numbers you shared earlier. The conversation may go something like this:
“We know that 84% of long-term care is provided in the home. And we also saw that the national median average for home care was $19/hour for homemaker services and $20/hour for home health aide services. Arriving at how many hours per day care are needed will help us decide the benefit amount.”
5. From there you can talk through the possibilities with your clients. What amount of coverage is enough for them feel comfortable and still have an affordable policy?
The cost of care can be immobilizing for some clients and that’s the last thing you want. By introducing important facts about the cost and the frequency of long-term care, you can educate clients about the risk and present an affordable solution. Need more assistance? Contact me anytime and download our long-term care insurance broker kit today.
