The Last Word On LTCI...
Ronald R. Hagelman Jr.
January 2013

Multi-Life LTC Insurance Sells Itself. To believe you will knock on a corporate door and convince them to buy this product illuminates the concept of false pride. The persuasive powers of even Dr. Phil could not create a conversion of spirit and intent unless there is already motivation for the sale. The truth about multi-life LTC insurance sales is revealed not created during the sales process.

The first hint about the true nature of the sale is that almost all multi-life sales originate at the worksite. Somewhere the need for protection has intruded into the normal atmosphere of benefit complacency. Perhaps someone in senior management has experienced firsthand the financial and emotional devastation commensurate with extended custodial care, or a consensus has developed among the rank and file that there is a major deficit in the existing benefit portfolio.

Multi-life sales are found, they are not made. Insurance solutions to existing known need are discovered and revealed as part of the inquiry process. The interest to understand LTC insurance alternatives is already in place. The knowledge that there is a potentially serious financial problem already exists. Even on those rare occasions when an agent actually asks an employer about LTC insurance, the predisposition to buy was pre-existing.

As I develop new cases, the first questions I ask have always been: Who started this conversation? Why are we talking about LTC insurance now? The source of the inquiry will define the success of the sale. Once the origin of the inquiry is located, the blueprint for a successful conclusion is already in hand. With the need firmly in place, you can roll up your sleeves and wade into the real sales process, determining and hopefully enhancing the commitment to solve the problem.

Start by visualizing the census as an Excel spreadsheet, particularly the occupation and income columns. The first conversation is always: Where will the employer draw the line of demarcation separating those for whom he cares the most? It may be only the owner and spouse. Hopefully, though, the level of concern will extend to additional employees such as vice presidents, managers, those with six-figure incomes, a certain number of years of service, or any other IRC Section 105 class distinction.

The initial carve-out decision is only the beginning, however; each and every time you must try to make a core benefit sale. At this point you must pull out all the tax benefits: premium deductibility, no payroll taxes and no W-2 income to employees—by definition, creating the cheapest pay raise ever provided.

Next you confirm your promise of discounted premiums and underwriting, as well as guaranteed portability, followed by your speech about providing incentive to employees to help them make the decision to protect themselves and their families.

Finally, you kindly suggest the obvious: The employers need to lead by example. If they do not visibly demonstrate that they care, how can they expect employees to do the right thing.

All of the above is how it’s supposed to progress. The carve-out and, hopefully, core buy-up sale is what we know works. Unfortunately there are a couple of serious impediments to the sale, one of which is apparently beyond anyone’s control and the other must be avoided like the plague.

A stagnant economy does not garner employer confidence that now is a good time to expand benefit offerings. This leads to the coward’s way out for employers and sometimes agents as well, unleashing the dreaded “voluntary” conversation.

Successful voluntary sales are very difficult to achieve. For there to be any prayer of success, several immutable iron-clad principles must be followed. At the very least, senior management, the owner or the board needs to buy a policy and then explain to their employees why they bought. Then the employer needs to provide blanket permission to communicate with all employees—preferably at home—at least three times.

An educational campaign is critical to providing essential information before any attempt at enrollment takes place. Employees must understand what LTC insurance is and is not; they must be given the opportunity to understand what the product means in their lives and how the math works, both in terms of inflation and premium. In other words, if employees are not given a chance to understand what it means to not buy a LTC insurance policy, the enrollment will fail.

Following all this, there must be a mandatory benefit discussion of at least 30 minutes to reiterate the above message and schedule individual meetings to customize the benefit selections and enroll spouses. Those individual meetings need to take place at work during working hours and separate from any other benefit enrollment.

LTC insurance requires a stand-alone education and participation process. I also try to require that nonparticipating employees sign and date a declination statement: “I opt out and decline to participate in my employer-sponsored offering of discounted LTC insurance premiums and reduced underwriting.” Anything short of these basic requirements in my experience does not work. Period.

Complying with the common sense ingredients of a successful voluntary enrollment is not the biggest obstacle to sales. The number one impediment to helping America’s employees protect themselves and their families is the dreaded human resources department. LTC insurance simply does not fit in their conceptual universe with other employee benefits.

My initial advice is to always go around, over or through the human resources “sales prevention” department. They will not and cannot understand the need to offer and sponsor LTC insurance (unless, of course, someone in the department has had a personal experience with caregiving). To begin with they most likely will never be included in any carve out that defines valuable employees. Thus, they would rather promote benefits like wellness care or pet insurance—products that everyone will get. They seemingly don’t understand any benefit that cannot be simply enrolled like all the other benefit offerings; thus, the enrollment process is considered intrusive and even minimal underwriting is perceived as a negative. In my experience, if someone in human resources is the primary benefit decision-maker, just walk away.

It has never been easy to assemble volunteers. Finding and encouraging good people to step up and take responsibility for their lives and the lives of others requires passion and insight.

Other than that I have no opinion on the subject. 

Author's Bio
Ronald R. Hagelman Jr., CLTC, CSA, LTCP
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 is president of Broadtower Insurance Solutions, a national IMO helping BGAs enhance LTCI production. Hagelman can be reached at Broadtower Insurance Solutions, Inc., 156 N. Solms Rd., New Braunfels, TX 78132. Telephone: 830-620-4066. Email: Website:

Leave a Comment