With a 70% chance that you’ll need some form of long-term care plus the rising costs associated with it, senior clients need a financial plan.
Short-term care insurance is one of my favorite ways to prepare for home health care, assisted living, and nursing home expenses for three reasons:
- Simple underwriting
- Affordable prices
- Fewer rate increases
Here are five tips to start cross-selling short-term care insurance to your senior-aged clients.
Tip #1: Add one question to your appointments.
Sometimes we can overthink things, but selling short-term care insurance can be as simple as asking: "If you needed care, would you rather go to a nursing home or stay at home?"
It gets the conversation flowing, which will help your client open up.
I like this type of question a lot better because it’s more personable and will bring the emotion out, which really helps build the need.
Here are some other variations of questions you could ask:
- If you need long-term care, who do you plan on caring for you?
- If you need long-term care, which one of your assets would you intend to use first?
- Have you ever had a family member go into a nursing home or get home health care? If yes, how did they pay for it? How would you pay for that?
Tip #2: Inform your current customers.
The easiest way to get started with short-term care insurance sales is to go back to your current customers. It’s never too late to educate your clients on the financial risk and the solutions you bring to the table.
Here’s an example of what you could say:
“Honestly, I probably should’ve talked to you about this a couple of years ago, so you can blame me for that. But I’m on a mission right now to catch up with all of my customers and make sure they know the options they have if they ever need long-term care. Right now, the cost for long-term care is about $8,000 per month…”
Be open and honest with your clients. This is an important financial risk they need to plan for, and you have a responsibility to warn them about it.
Tip #3: Bundle short-term care with a Medicare Supplement plan.
If your client is a good candidate for a Medicare Supplement plan, consider bundling a short-term care plan with it. Some carriers even let you apply for both products at the same time if you’re doing an e-app, which makes it extremely quick and easy.
One way to bundle the two together is to ask your client during the Medicare Supplement application process: do you want the short-term care benefit with this?
Tip #4: Compare the premium before and after your client’s birthday.
If you have any clients with a birthday coming up in the next 60-90 days, it’s a perfect time to talk to them about short-term care insurance. Talk to them in person or write a letter.
Short-term care insurance premiums are based on age, so if your client gets their policy before their birthday, they’ll be able to lock in that rate. If they wait until after their birthday, the premium will go up.
The age at which the short-term care premium will go up depends on the carrier. For example, Aetna does age bands of 65-69, 70-74, 75-79, and so on up to age 89. If you have a client who is about to turn 70, right now is a great time to lock in that 65-69 rate! It’ll save them around 25% in their annual premium.
Simply show them the price difference, and that can provide some urgency.
Short-term care premiums are locked in so the price won’t go up on them with subsequent birthdays. Rate increases would be the exception, but those are rare.
Tip #5: Provide three options for short-term care coverage.
When helping your client put together a plan, it’s a good idea to give three different options in a variety of price ranges that include the benefit period, waiting period, and daily benefit amount. Some carriers also have some other add-ons you can include.
An example of what these options could look like:
- 90-day benefit period, 100-day waiting period, $100/day
- 180-day or 270-day benefit period, 20-day waiting period, $150/day
- 360-day benefit period, 0-day waiting period, $200/day
Showing a wide range of options like this will show your client that they can get coverage for as little as $15 a month, or they can get a very comprehensive plan with a premium closer to $150 per month.
In my experience, most people choose the middle option.
As an agent in the senior market, you have a responsibility for educating your clients and making sure they know the financial risks that may come up. Even if they choose not to get a short-term care policy, you’ll have peace of mind that you made sure they were aware of it.
Cross-selling short-term care insurance is pretty simple: just ask a question and the conversation will go from there. At the end of the day, if you don’t ask the question, you won’t get the sale.
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by Tyler Petersen
on Thursday, August 31, 2023
Senior Market Insurance