The challenge for advisors is putting their clients in the proper mindset so they can focus on the problem and solution, not on the product. Clients who understand the problem are more open to hearing about solutions. When advisors can determine their clients’ understanding of the problem, they can more effectively select the proper solution and present it in that context. When that happens, clients readily take ownership of the solution.
Sometimes advisors do not take the time to engage in a collaborative conversations with their clients, probing them for their hopes, dreams, and feelings about their family support system. This may result in an approach that may not match the client’s budget or priorities.
Matching Solutions to Clients’ Concerns, Priorities
First American Insurance Underwriters has produced an outstanding piece—The LTC Navigator—to assist advisors in matching the right product solution to their clients based on their circumstances, needs, and priorities. It provides context for why certain clients would favor one solution over another, along with their pros and cons, forming the structure of an effective presentation.
If you determine your client is budget conscious, wanting to solve the problem with the least amount of money out of pocket, it presents traditional LTC insurance as the lowest cost solution.
Linked Benefit/Hybrid Solution
If your client is concerned about “wasting their money” on something they may not ever use, the linked benefit solution offers a combination life and LTC benefit with the possibility of a 100% return of premium. To fund the product, clients can transfer existing cash-value life insurance, or annuity assets via a 1035 exchange.
Life Insurance with LTC Rider
A life insurance policy with an LTC rider may be the best solution for clients who recognize the need for LTC protection but want to emphasize life protection for the benefit of their heirs. The policy can be funded all or in part through a 1035 exchange of existing life policies.
Annuities/Leverage/Tax Efficiency with a Single Deposit
Finally, if your client has an existing annuity earmarked for future income, you can offer them an opportunity to leverage it to double, triple, or quadruple the annuity value as a tax-free source of extended care funding. This is also a better solution for clients with morbidity issues because the underwriting is less stringent.
Clients Want Solutions, Not Products
It can be said with a high degree of certainty that most people do not like to buy insurance products however they will buy solutions that address their concerns and/or solve their problems. The LTC experts at FAIU (First American Insurance Underwriters) can help you determine the most appropriate solution based on your clients’ circumstances, help you address typical objections, helping position you as a true problem solver.
Review The LTC Navigator here.
— By Ed Stone, LTC, DI & Annuity Specialist