Multitask Client Dollars With Hybrid Products

Are you up to speed on what’s new in long-term care (LTC)?

The discussions around that topic continue to grow. As financial advisors, we are living in an environment that is ripe with opportunity for us to help clients navigate through this issue.

I am sure you are aware of the benefits surrounding long-term care insurance (LTCi) that went into effect through the Pension Protection Act in 2010. The insurance companies continue to respond to these legislative changes by giving us more and more products that address them and enable clients to lever-age and multitask their money.

With the increases in product variations that include LTC components (as well as other “living benefit” types of features), the need for a knowledge-able brokerage agency to help you, as an advisor, make the proper recommendation to your clients is growing as well. More and more wholesalers (BGAs or IMOs, depending on what they label themselves) are expanding their offerings and knowledge base to help simplify these products for advisors; this allows you in turn to simplify them for your clients.

The key to explaining hybrid products (i.e., ones that have multiple purposes) is simplifying the needs of the client into a handful of issues and illustrating how the product can help address those riders available on a life product, and needs.

For example, let’s take a husband wife, ages 58 and 56. Both are still actively at work and they have two kids out of college plus one more just finishing up. They are working with you to diligently plan for retirement, but they are concerned because her mother has become ill, they are feeling the effects having to deal with this issue both emotionally and financially.They believe they still need some life insurance to provide for the other if something were to happen to one of them, and they also want to leave a legacy for their children. And then there is the whole LTC issue. Is there a way to deal with all of these issues in one policy? With the variety of products that are available in the market today, the answer is a resounding YES! Clients can leverage their money to multi-task their dollars to deal with each of these issues. Life insurance or an annuity that has an LTC provision included and accumulates cash or provides an ongoing stream of income are two products that absolutely meet multiple needs for the client and efficiently put to rest their concerns.

One of the challenges we see advisors facing when combining LTC benefits into life and annuity products involves the continuing education producers are required to obtain by many states in order to discuss LTC insurance options. Many states have adopted the partnership program and this list continues to grow.  As a result there is additional training required to enable producers to have any kind LTC conversation.  If you are talking to a client about the benefits or Riders available on a life insurance product, and it includes a feature for LTC, then most of the time, you have to be certified. Our recommendation: Just DO it! It really doesn’t take that long to go online to a CE vendor like WebCE and do the required LTC Partnership training. It will certainly help you be more informed as you continue to prepare your clients for the future, which should include a discussion about how they plan to pay for LTC. Plus, when you are ready to write a case, it’s already done!

Many of you may have a primary carrier that you normally use for the products you sell to your clients. However, consumers continue to become more products that absolutely meet multiple savvy in looking for the “best deal,” needs for the client and efficiently put to making it even more important for you rest their concerns. to have a strong relationship with a brokerage general agency that can help you shop the market for your clients. BGAs have strong relationships with insurance carriers, just as you have strong relationships with your clients. Leverage your relationship with your BGA and maximize THEIR relationship with the carrier, to the benefit of your clients.

Christi M. Daughenbaugh is the vice president and chief operating officer of Dallas-based Borden Hamman Agency and the 2011 NAILBA chairman of the board. For more information, visit


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