LTCI: Finding success in the LTCI market
The Essential Guide
Despite the volatility in the long-term care insurance (LTCI) market, Meredith Pensack, CLTC, has continued to thrive. As owner of Long Term Care Insurance Planning in Newton, Mass., she’s consistently placed highly in the American Association for Long-Term Care Insurance annual sales rankings and is a member of the Million Dollar Round Table. Senior Market Advisor recently asked Pensack, an independent agent who works with several carriers, for her business and industry insights.
SMA: When and why did you get into the LTCI business?
Meredith Pensack: I became licensed in 2003. I was the care coordinator for a great aunt who lived out of state and as she aged she needed some assistance. What she really could have used was home care or assisted living but she didn’t have the funds for that. So, unfortunately, she ended up going on Medicaid and into a nursing home even though she didn’t have that intensive care need. I turned to my husband and said, ‘We’re never going to let this happen to us’ and we got long-term care insurance at a young age. Years later I sat for the insurance exam to represent the product.
SMA: Who are your LTCI clients?
Pensack: My average client is in their late 50s and has stopped paying for college tuitions and perhaps thinks that their term life insurance is somewhat less important at this time. We will look at funding long-term care insurance through premiums that used to be set aside for life insurance. Another key element is that many of the people I speak to have lived through a parent needing care. It becomes a wake-up call for them to explore this topic for themselves.
SMA: Do you work any other group or worksite markets?
Pensack: Only when I stumble upon it. For example, I recently spoke to a woman who happened to be a vice president in a small nonprofit in Boston and I am now set up to do presentations to the employees and am setting up a small group for her organization. But most of my business is with individuals.
SMA: How do you acquire clients—what’s working for you?
Pensack: I primarily speak to people who are currently experiencing or who have recently experienced a long-term care nightmare, often in dealing with a parent’s care. You can’t find a more motivated prospect than this. Also, forming relationships with centers of influence still tops my list. Although it took several years to establish these relationships it’s been a steady source of referrals for me.
SMA: LTCI-pricing has been volatile. Are perspective clients expressing awareness about insurers raising premiums or pulling out of the market?
Pensack: I do get a lot of questions about this and I have some thoughts about the industry changes. It seems to me that the carriers that are left intend to keep their business strong for the long haul. We are seeing the rescinding of unlimited benefit periods, more stringent underwriting requirements and the reduction in discounts. This is part of the process of redefining how those carriers are going to remain profitable over the long haul. It is a painful process for the agents who remember selling in the good old days, but I feel like we are going to have to adapt if we’re going to continue to be successful in the future.
SMA: How do you explain the industry’s changes to prospects?
Pensack: Use the unlimited benefit period as one instance. Imagine if a life insurance product had an unlimited benefit and when your loved one died, the insurance company said take as much as you want. That’s just not realistic. What the insurance companies have been finding is because so many of the earlier products were sold with unlimited benefits it really wasn’t very profitable for them. They’re realizing what they have to do to tighten up and I do explain that to prospects.
SMA: Can you share any advice for succeeding in this environment?
Pensack: I would say every day think about the claims that you’ve helped with. If you’re new, speak to a more experienced agent about the calls that they get from the spouse or the adult child (whom they’ve helped). Try not to lose sight about what this is really about, which is fulfilling a promise in a time of need.
By Ed McCarthy for the November 2012 issue of Senior Market Advisor Magazine.