The Long-term Care (LTC) family of products includes coverages for nursing homes, adult day care, home health care, assisted living facilities, and other related benefits. LTC has unique qualities, and there are many variations among the carriers.
LTC isn't a new concept. The coverage has been around for decades, but only recently has it been widely discussed. With the new wave of interest in LTC, sales took off slowly, built up, and then leveled off. All of this activity adds up to this picture: A large number of LTC prospects have heard about the product but haven't yet bought it. Why not?
WHY SALES ARE SLOW
- Unfamiliarity with the coverages. Despite consumer articles about LTC, the coverage hasn't yet been widely seen in action. The typical consumer doesn't have many friends or relatives - if any - who've been through the claim/benefit/satisfaction cycle. And despite statistics predicting the need for LTC coverage, the consumer doesn't perceive its use to be as inevitable as that of a Life policy.
- Limited range of carriers offering LTC. The number of LTC carriers can be counted in the scores, rather than the hundreds, in most states.
- Limited acceptance by agents. LTC is a product that calls for specialized marketplace expertise, and many agents find it's often a two-call sale. So many prefer to call in LTC specialists, willingly splitting the commission to gain a comfort level with the transaction.
- Difficulty in prospecting. While seminars, lead programs, and advertising produce business - sometimes very handsomely- most LTC specialists (like most Life/Health agents in all categories) spend too much time prospecting.
CROSS-MARKETING
In sum, there's a demand for LTC, a substantial market to be seen and sold, and a need for prospects and agents to be efficiently brought together. This scenario presents an open invitation to the cross-marketing-minded P/C agency.
A P/C agency has - or can easily build - a huge volume of prospects for LTC on its books. It has good, sometimes very close, relationships with those prospects, having provided them with other coverages and established a base of trust with them. And the P/C agency may already know many of the background factors that are more important in LTC than in other forms of insurance (for example, where family members live, their financial picture, and various other personal details).
The challenging question for P/C agency management might not be whether to mount a serious campaign to sell LTC, but rather how to do it. If an agency already has at least one in-house Life and Health producer, developing leads may be all that's necessary - provided, of course, that the staff's expertise and time permit the added line to be handled properly.
OUTSIDE EXPERTS
Unless the agency is large enough to support an in-house LTC specialist, it's advisable to consider working with someone from the outside with LTC expertise. That source could be a PPGA, an MGA, or perhaps a 'circuit rider,' a trusted agent serving more than one agency. Group cases should also be developed now that group LTC is available.
Specialization in LTC is crucial, because the product demands a professional sale; anything less could lead to problems. It's important not only to develop LTC expertise, but also to keep current with marketplace developments. The rewards are ample: rounding out of client coverages, thus reducing E&O exposure (ie., 'My agent never offered me this coverage!'); better client retention; increased referrals (which can lead to entire accounts); and - of course - profit.
The time is ripe for P/C agencies to develop complete Life and Health marketing operations, and LTC should be an important part.