Getting An Education

It seems that asking the right questions of those most intimately involved in a particular activity would qualify as one of those proverbial “no brainers.” You might think this would be especially true concerning the mystery of our continuing sales deficit in reaching any reasonable level of critical mass in convincing consumers to accomplish some forethought when it comes to long term care planning. Or to put it in my provincial hyperbole, even though we have picked through the field numerous times there is still pickable produce as far as the eye can see. Which would suggest there remains an abundance of opportunity for sales. In my humble opinion, as expressed frequently in this column, the emotional and financial conflagration caused by the need for custodial care remains the largest unprotected and, therefore dear readers, the most undersold risk in America.

The recent research (Who Is Selling What? To Whom, How and Why?), conducted by Oliver Wyman and Ice Floe Consulting and reviewed last month in Broker World, was designed specifically to ask the agents and advisors closest to potential sales what they thought contributed to greater success. What could be done to improve sales performance and help many more protect themselves and their loved ones? Reminding everyone this is an opinion column, let’s dive directly into what this columnist thinks the research told us loud and clear.

First, as we know, we are rapidly aging out in our chosen profession with 85 percent of advisors participating in the survey over age 50. Even though it is propitious that the average age of perhaps the most opportune demographic to be selling to coincides with those on the front lines trying to complete the sale. Even though it has been observed ad nauseum, we simply must recruit more younger troops. Adverse underwriting conditions and expensive premium thresholds continue to turn away far too many at the door. Why would anyone wish to sell a product where half of your submitted sales were certain to be declined, and the first reaction of every potential customer was to faint at the sight of the premium?

The most important takeaway from the survey was an understanding that additional education/sales training would be welcome and critical to building sales success. It was specifically because the survey was designed to examine, in as much detail as possible, the forces at play at the point of sale that a roadmap for future training was illuminated.

This column will continue to try to interpret and capture the most significant components of building sales success revealed by the survey.

The stakeholders interest in future training success falls comprehensively across all company and distribution platforms. At this point let’s begin with an inventory of advisor perceptions, contributory sales themes and training strategies revealed:

  • Survey participants were incentivized to complete the survey by promising that the cumulative results would be provided to all who completed the survey on a purely voluntary basis. The survey respondents were therefore a cornucopia of professional approaches to the sale from CPA’s to Medicare supplement specialists. The common denominator was that regardless of their approach to the sale it began by simply including the importance of long term care planning in their professional practice. This is the point of entry and recruitment. This is the key ingredient to market expansion. The risk must matter!
  • Three-fourths of agents admitted they primarily work an upscale market but they also overwhelmingly agreed that future growth must come from more middle class sales. There was an understanding that we must return to helping those most clearly at risk. The intrinsic knowledge that this frequently voiced mission will require reducing cost, which consequently requires a reduction in benefit, was understood. The survey revealed there is fertile ground for a different approach to sales growth as only five percent of those surveyed approached a sales opportunity with a total insurance risk replacement proposal. Nearly 95 percent were presented as partial risk replacement. Less can be more, and training to enforce a greater coinsurance approach needs greater emphasis.
  • Difficulties in combo life sales were also identified. Terminology itself begins the confusion. Health riders versus life riders still remains a significant source of consternation.
  • Advisors were well versed in the meaning of paying for a long term care planning option vs those popular ADBR options that do not require a current premium. A willingness to incorporate normative values of good and bad rider options needs to return to front and center in future training. Something is not necessarily better than nothing. Quality sells and training must shine a spotlight on the obvious.
  • The survey recognized that the shift from singular to multiple modal premium options dramatically increased access to more middle class buyers. Premium thresholds simply hold more significance with long term care planning.
  • Perhaps the greatest V8 moment in the survey was the role traditional policy review could make in future sales training. The absence of a planning option justified policy replacement among the great and vast majority of agents. The concept of adding living benefits to new sales has always been an additive concept, but the willingness to exchange up has not been adequately explored.

Agents/advisors look to their chosen distribution partners and primary carriers for sales knowledge as well as product education. No one can argue that we have not had substantial attrition in the ranks of those willing to make this sale. My usual Pollyanna wish of course would be that we could all work on recruitment and training together. At least we are beginning to see an outline of strategic directions to improve sales and a concept emphasis that could lift all boats. More and better trained troops is a no-brainer.

Other than that I have no opinion on the subject.

Ronald R. Hagelman, CLTC, CSA, LTCP, has been a teacher, cattle rancher, agent, brokerage general agent, corporate consultant and home office executive. As a consultant he has created numerous individual and group insurance products.

A nationally recognized motivational speaker, Hagelman has served on the LIMRA, Society of Actuaries, and ILTCI committees. He is past president of the American Association for Long Term Care Insurance and continues to work with LTCI company advisory boards. He remains a contributing “friend” of the SOA LTCI Section Council and the SOA Future of LTCI committee. Hagelman and his partner Barry J. Fisher are principles of Ice Floe Consulting, providing consulting services for Chronic Illness/LTC product development and brokerage distribution strategies.

Hagelman can be reached at Ice Floe Consulting, 156 N. Solms Rd., New Braunfels, TX 78132 Telephone: 830-620-4066. Email: