Our world is full of complicated information. And the insurance industry is notorious for creating products that can be hard to understand. I’m sure we’ve all had clients suffer from “analysis paralysis” when trying to decide between multiple solutions. But it doesn’t have to be scary.
As advisors, we experience success when we can break down the complexities into a strong solution that the client can understand. And, believe it or not, it IS possible to simplify the way we help our clients fund a long-term care plan.
Once you’ve talked with your clients about long-term care and helped them understand the value of a written plan, it’s easy to stall out. But a written plan is only half the story. If they decide to use an insurance strategy to fund the plan, they will need our expertise to figure out the best way to proceed.
To keep it simple, there are four main categories to consider when finding the funding. Learning about your client’s complete financial picture will be your guide when deciding which funding option to recommend. And, once you’ve got that figured out, your Ash team is perfectly positioned to help create an individual solution for each client. The key is to choose a funding method that won’t force the client to sacrifice lifestyle or other financial goals.
Let’s look at each option, and which type of client it is most likely to fit best.
As advisors, we’re juggling lots of moving parts to create a solid financial plan. The upside is that by understanding the complete picture we’re in the perfect position to take assets from vehicles that don’t meet the client’s needs and use them to fund a long-term care plan. Because without a solid plan for long-term care, the entire retirement plan is at risk. And that’s something to be afraid of.
When you believe in something, you talk about it. To everyone. Some clients seem to embrace it. Others seem to blow it off. That can be hard, but it seems to be the nature of our business.
For us, that conversation is long-term care planning. We understand why having a plan for the future matters so much. Sometimes it’s hard for clients to grasp. But it’s something we believe in strongly, and a message that we’ve worked hard to share. You may have brought up the topic with your clients and gotten mixed results.
So, when we say have the conversation with everyone, we mean it. But rather than blindly bringing up the need for an LTC plan, it makes sense to start with the clients who will be most receptive to what you have to say.
Not sure who those clients are? Start by looking at their ages and determining which stage of life they are in. In each group, your most likely prospects will share some of the same characteristics.
The common thread: At any age, your strongest prospects are those that have seen first-hand a loved one experience a long-term event. They’re planners. They believe in insurance products and the protection they offer. And they can to afford to purchase those products.
For this age group, start with high-income earners who are helping parents or grandparents prepare for an emergency. They are dedicated planners who already have life insurance, potentially with high cash values.
Most likely, these clients will seek you out to discuss LTC. The strategy with clients in their 40s is to remind them that buying young costs less and allows for fewer hurdles when it comes to underwriting.
Your most likely candidates have substantial assets they don’t want to risk losing. They’ve saved and planned. They might be currently helping their parents through a long-term care event, but they no longer have children dependent on them at home.
When approaching these clients, talk about the need to be proactive. Underwriting should still be relatively smooth. Plan to have more than one appointment with them. Use a strategic approach.
Focus on clients that have enough assets to fund a long-term care plan without invading their retirement income. Look for clients who are relatively healthy and who have idle assets earmarked for an “emergency.”
The message for clients in their 60s is to act before they need extended care. It’s easy to start the conversation because it’s already front of mind for these clients. Let them know you can help reposition idle assets to cover a possible long-term care need and possibly leave a legacy for their grandchildren.
Once you’ve identified who you want to talk to, reach out to your Ash LTC team for strategies and solutions. We’ll help you create a plan that fits for each individual, no matter what stage of life they are in. There’s only one thing you have to do: Just Ask.
In every successful business, there’s always a handful of people you couldn’t do without.
Some are out in front. Others, behind the scenes. Either way, they are the people that make the business go. Without them, the business owner would be lost.
Maybe it’s the top sales person, bringing in more revenue than everyone else. Or the office manager who takes care of the day-to-day tasks — tasks that everyone else doesn’t even realize needed to be done. Or it’s the programmer who provides the skills needed for technology to be an asset instead of a headache. It could be all three.
Think about your business owner clients. What would they do if they lost an irreplaceable person? Would they have to close the doors? Or sell the business?
In our industry, we’re committed to planning for the future. We protect individuals, families and businesses from life’s “what ifs.” We help them prepare financially. And we help them avoid risk whenever we can.
When working with your business owner clients, don’t overlook the need for key person disability insurance.
There’s a good chance that you’ve talked to your business owner clients about purchasing life insurance on key employees. If that’s the case, they’ve already identified those essential people that drive the success of the company. If not, that’s the first step. Talk to your business owner clients and figure out who they consider key employees.
Once identified, discuss what the employer would do without them. Although we often look at life insurance first, there’s a higher chance that the person will become disabled, not die. Fortunately, we can protect against that.
Key Person DI helps a business owner replace lost revenue when an essential employee becomes injured or disabled. And there are lots of options out there, and lots of ways to customize coverage to fit specific needs.
Most key person DI policies work the same, with the benefit:
Let’s think about that in practical terms. You have a business owner whose key employee is out on a disability, and they aren’t sure how long the illness will last. After personal concern for the employee, cash flow is most likely the next big need. With a key person DI policy in place, it’s a huge relief to know that the business will have cash benefits to spend on hiring a temp or outsourcing certain responsibilities. It means they can stay afloat while still being supportive of the employee. In many cases, it’s the difference between barely surviving and being able to continue to move ahead.
Get everything you need to know to get started talking about key person disability with your clients. Download our free solution sheet, "Key Person for Non-Owner Employees" for more!
We mentioned that there are many ways to design a policy, and we weren’t kidding. But there are some general guidelines to use when figuring out the right level of coverage. And your Ash team is always here to help.
Specifically, you should consider:
Although nothing can replace an employee that’s, well, irreplaceable, key person DI can offer financial protection. In addition to providing funds for a temporary replacement or to offset the cost of recruiting new talent, a key person DI policy can assure clients and partners that the business is financially stable. And it’s a great employee retention strategy.
Don’t limit your discussion of key person coverage to life insurance. The need for DI protection is just as important — and just as achievable.
© 2018 Ash Brokerage LLC.