Insurance World

Kids today face an ever growing number of temptations ranging from drinking and smoking, drugs, gambling and pre-martial sex. Unfortunately, due to their youth and inexperience they fail to realize that what they do in their youth can have a great effect on their quality of life as they grow older.

On the other hand, as people grow older and approach retirement age they begin to realize that the carelessness of their youth did have a profound effect on the quality of their life but now they are ready to do whatever it takes to remove as much risk as they can. As a result, an ever increasing trend has been the purchasing of long term care health insurance as one way of reducing the financial risk a prolonged illness poses.

Long term health insurance is one the best ways to reduce whatever fears you may have in terms of how you’ll be able to take care of your health after (and in some cases at a much younger age if you are the victim of an untimely accident) retirement as well as ensure your family (your spouse, children and even your grandchildren) that they won’t get saddled with the potentially huge amount of debt that can result from the high-cost of medical care. Long term care health insurance is one of the best ways to guarantee that not only will you receive higher quality care but that you won’t lose a lifetime worth of savings in the process.

Because health care costs continue to rise at dramatic rates nearly every year, it’s becoming increasing advisable to begin coverage much earlier in life. Traditionally, individuals wouldn’t even consider long term care until nearing retirement or even until after retirement but you may want to reconsider your thinking if that’s been your plan. A few big reasons you may want to consider looking into long term care health insurance as early as your mid 50’s are premiums and approval. Policies taken out when someone is in their early 50’s (this is still seen as a favorable age group ) is much less expensive then one initiated in their early to mid 60’s and the older you get the higher the premiums.

However, if you take out a policy when you are younger you will continue to pay the same premium even as you get older. Sure, you may pay for 10, 15 or 20 years before you need it but when you do need it you’ll have much better coverage.

Another big reason you may want to consider taking out a policy earlier in life is that you greatly increase your odds of getting approved with no riders or other exclusions. Once you get hurt or sick and realize you need long term health insurance then it’s too late to get coverage because no insurance company will issue you a policy - at any price.

If you’re currently a little older and you have other income besides your Social Security benefits or Supplemental Security Income (SSI) and you absolutely have no trouble paying for your daily needs and all your monthly expenses then you should definitely look into a long term care health insurance plan.

Once you make the decision to look into purchasing a long term care health insurance plan you need to be aware that whatever company you talk too will assess your health and you current state of life before issuing you a policy. That will assess your ability to handle the Activities of Daily Living (ADL).

These so-called Activities of Daily Living are activities like: taking a bath, continence, dressing yourself, eating by yourself, going to the toilet (without any help from others) and getting yourself in and out of bed. If you can’t most if not all of these activities you change of getting approved and a policy issued is greatly reduced.

On the other hand, different companies use different approval criteria and there are different types of policies you can apply for. Some policies are geared towards home health care or having a personal home nurse while others are designed for care to be received while staying in a long term care facility. You will be given the option to choose the type of plan you would like when you apply but like most things, you pay for what you get and different plans come will different price tags. Just make sure you thoroughly understand all your options first and if you feel pressured and uncomfortable then politely move on to the next company to apply.

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Coveting leads for prospective clients
Phillip joined our captive company for two reasons–and was soon asked to leave. One, we have products that are better than anything he could offer through his privately owned agency. Two, we have a lead system (for which we pay 7% of our commissions) that eliminates some of the work of finding prospects. Unfortunately, he continued to operate his own agency as well which was a violation of his contract.

Whether Phillip was right or wrong, his action illustrates a truth known to all insurance agents. Finding people to talk to is the most difficult part of the insurance business. Referrals and call-backs are the secret to success. But getting the clients who will do the marketing for you involves a lot more than just selling them a policy.

Keeping clients once you get them
Developing a lead into a long term client can be summed up with one question. How much time are you willing to spend, and how much service are you willing to provide for which you will not get a commission in terms of dollars?

Getting the appointment with your prospect is the first step in getting the business. Without that appointment, you have no business. However, it is only the first of many steps toward getting and keeping the business.

Being seen as a “real” person
We are living in a day when trust is dangerous. Numerous scam artists lurk in the streets, watching for an opportunity to take advantage of the unwary. With that in mind, it is important to let your prospect see you as a real person–someone with a phone number, an address, a family, perhaps some interests in common. I tell my prospects why I am in insurance, what I did before that, and where I live. I also give them a small written bio in the form of a bookmark that has pictures of me, my kids, and my grand kids. We engage in a five or ten minute exchange where they tell me a bit about themselves as well. It breaks the ice, as I’m not likely to scam a person who has enough information to put me in jail.

Getting to the need
Within a few minutes, we transition to business. I usually ask if they know anything about my company. Even if they do, I have a bit more information ready to give them such as the kinds of service we provide, the speedy claim payment for which the company is known, and the assets that support the company as a whole.

Even when I know what product the client is probably interested in, I begin with a simple questionnaire that we call a “needs assessment.” I have a couple of variations, depending on the situation. For example, I find out very quickly what health insurance a person has; if she has Medicare and Medicaid, I know that I don’t need to waste time on Long Term Care, or any kind of health product other than a prescription drug plan. The only thing I can help such a person with is their life insurance.

Understanding the prospect
Once I have determined what my approach should be, I simply explain that my purpose is to give them information followed by some options tailored their unique situation. To do that, I must ask a few questions. The next step will be a decision which will be up to them to make. That decision will be to either take action on one or more of the options, or to do nothing.

Then I simply ask questions about the areas that have the most impact on a person’s future regarding life and health. If they have life insurance, what kind is it, and when was it last reviewed. If possible, I will ask them to get their policy and let me take a look at it. Doing so has turned up policies that were Term Life about to expire–or universals with premiums about to increase. Nearly everyone thinks he has “whole life.” In my experience, at least 60% are sadly incorrect.

If a client has health insurance which is currently serving his needs adequately, I inquire first about his health, and then about Long Term Care. If a person is already using a walker or wheelchair, or has serious illnesses like diabetes requiring insulin, for example, there is little point in discussing Long Term Care as he won’t qualify for it. If his health is good, however, I will simply engage him in a discussion about family members or friends who have needed extended care. The point is, we have to establish the possibility that at some point in the future, extended care is likely to be necessary, and that putting the burden on family members strains the emotional, physical and financial health of the family along with putting the life long savings and family home at risk.

Educating the prospect
The underlying purpose in all this discussion–which can take from 20 minutes to an hour–is not sales. It is education. Many people –not versed in insurance language–are confused about what they already have. Insurance is something people buy because they have to; then they put it in a closet and forget about it, believing they have everything they need, and locking the mental door against anything new. An agent who can open that door and either verify or clarify their understanding about their insurance possessions stands a much better chance of making a new sale.

Sometimes opening that closet is like opening a can of worms. Recently a client shared two 15 year old life insurance policies–$50,000 each–on himself and his wife. The policies were both labeled “whole life” both on the cover sheet and on the deck page. His also said “payable for life” beside the premium. This year he received a notice saying that if he wants to keep the $50,000 his premium goes from $60 per month to $308! His wife’s premium would go to about $290. He had already called the company and had been told that regardless of what the deck page says, the policy is actually a Term policy and that the premiums will continue to increase. Nothing on that policy says Term. However, there is a paragraph which he had never noticed and did not understand, which said that the premium was subject to “periodic recalculation.”

Does the client have grounds for a complaint and return of premium? I would think so. But whether he does or not, he knows, that even though it will cost him more now than it would have 15 years ago, he wants a policy that will have no increase in premium and will not decrease in benefit–guaranteed whole life. If I hadn’t discussed his complete life/health insurance package with him, he would never have known.

Delivering the policy
Once a policy has been issued, our company requires personal delivery and obtainment of a delivery receipt. It has been said that every minute spent with a client upon delivery of a policy is equal to a year that the client will stay with the company. Furthermore, many more policies are sold at the time of delivery than are sold on a first visit. The client has trusted you enough to take the first one. Take the needs assessment with you and review it before getting to the house. A completed needs assessment will have possibilities between the lines. Are children getting married, grandchildren being born? Who is the beneficiary on the life policy you are delivering. Offer to visit that person, give them a business card with the policy number written on the back, and let them know that in the event a claim needs to be made, you will be available to help or answer questions.

Generating repeat business possibilities
Once the business is complete, generate more business by doing the unexpected. You can drop in when you are in the area, deliver a small box of Russell Stover chocolates (at less than $2.00 out of your pocket), or some other small gift that simply says “thank you for your business.” A small gift or card–for no reason whatsoever except to say thank you–will go a long way in keeping your clients and finding new ones.