“Logical underwriting.” That’s how one agent describes Mutual of Omaha’s LTC underwriting process.

According to Chief Underwriter, Corey Aldy LTCP, Mutual of Omaha’s underwriting philosophy is to view applicants as more than a list of diagnoses.

“Underwriters look at the total picture, including the person’s health, cognitive status and lifestyle,” Aldy said. “Applicants who have chronic health conditions but are physically and socially active and work with their physicians to control their health issues are viewed favorably.”

For example, diabetics who use less than 50 units of insulin a day may be considered for Class I coverage. Or, people who have had a single stroke and are fully recovered after two years also may be insurable at Class I.

Three Underwriting Case Studies
1. A 62-year-old female applicant reported hypertension and depression. She had a job and was active in her community. The agent quoted the case Select. The application was complete (no missing information) and the agent placed the call to initiate the personal health interview (PHI) before leaving the applicant’s home. The phone interview revealed her blood pressure was acceptable and the depression, which had been related to menopause, was no longer an issue. The case was issued as applied for.

2. The applicant, a 57-year-old female, told the agent she had diabetes. He asked the right questions and learned she used 30 units of insulin a day, which he knew fell within Mutual of Omaha’s acceptable guidelines. He quoted the case Class I. An APS was requested (standard practice for all diabetes cases) and it confirmed her diabetes was controlled, she was in compliance with doctor’s orders and there were no diabetic complications. The case was issued as applied for.

3. At the time of her application, a 66-year-old female who was 5′2″ and weighed 189 pounds reported depression, a knee replacement and a history of endometrial cancer as her only medical conditions. She was active, volunteered in her community, walked daily and watched her grandkids regularly. The agent quoted the case Preferred; however, Select would have been more appropriate. The APS revealed her depression was stable and she was doing well following her knee replacement. It also revealed an undisclosed condition – osteoporosis. Many times, it’s what applicants fail to mention that makes them uninsurable. But in this case, the osteoporosis was moderate. The case was issued Class I based on osteoporosis with a T score of -3.0, the applicant’s build and noted knee replacement.

How Can You Ensure a Positive Underwriting Outcome?
Aldy said the underwriting team is eager to work with you to find ways to issue your cases. She recommends pre-qualifying your applicants by sending an e-mail to ltcunderwriting@mutualofomaha.com. Submit your request for prequalification by 2 p.m. Central Time and you’ll have an answer by 5 p.m. the same day. Be sure to include the applicant’s height and weight, medications taken, disclosed health conditions and tobacco status plus anything else you think the underwriter should know.

“Remember the more you can tell us about your client,” Aldy said, “the better the chance for a positive underwriting outcome.”

1. Familiarize yourself with underwriting requirements in the agent guide. It contains height and weight charts, a list of medications associated with uninsurable conditions and other important information to help you judge an applicant’s insurability.

2. Pre-qualify the applicant. Submit your request for pre-qualification to ltcunderwriting@mutualofomaha.com by 2 p.m. Central Time and we’ll have an answer for you by 5 p.m. the same day. Guaranteed.

3. Use the correct application. Be sure to use the application for the client’s state of residence.

4. Answer all questions on the application and complete all necessary forms. Submitting an application with missing information adds to the issue time.

5. Include a cover letter. The more you can tell us about your client, the easier it is to provide an underwriting decision. Include information like specialty physicians the client may be seeing, dates of last doctors’ visits, all medications, current health and activity level and whether the client has been declined for LTCi coverage by another carrier.

6. Provide your contact information on the producer statement section of the application so we can reach you if we have questions or if information is missing.

7. Prepare your client for the health interview. Explain the importance of the interview and help your client gather the names of doctors and all prescription medications.

8. Place the call to begin the health interview before leaving the client’s home. Call 866-544-1617 and turn the phone over to the client. Remember, you must not be present during the actual interview.

9. Check your pending report regularly to monitor the status of your case so you can resolve issues quickly.

10. Contact an underwriter if you have questions or are unsure about submitting an application. Our underwriters are available weekdays from 8 a.m. to 4:30 p.m. Central Time. Call 800-551-2059 or send an e-mail to ltcunderwriting@mutualofomaha.com.

Some agents think an objection means they’ve lost the sale. Others know client objections present excellent sales opportunities. Here are three of the most common objections plus some good ways to help turn them into sales.

1. It’s too expensive.

People who think they can’t afford an LTCi policy may be surprised to discover they can’t afford not to have one.

• Use Mutual of Omaha’s cost of care booklet (M26548) to establish the cost of LTC services. Then ask whether the client would be able to write a $5,400 monthly check to a nursing home
• Show the premium break-even point. Paying $2,000 per year in premium totals $20,000 over a 10-year period. It would take just 100 days of nursing home care at $200 per day to reach $20,000. So in this situation, the break-even point is 100 days

2. My kids will take care of me.

People typically don’t want to become a burden to their kids. Here’s how to get them thinking about what being a caregiver really means.

• Talk about the cost associated with kids caring for a parent. Ask which child could afford to stop working to become a full-time caregiver
• Point out that an LTCi policy allows kids to keep the promise they made to care for their parents by hiring professional help to do the things they can’t

3. I need to think about it.

For most people, purchasing LTCi isn’t an immediate priority. Here’s the perfect opportunity to discuss the cost of waiting.

• Talk about the best time to buy LTCi, which is the day before it’s needed. Unfortunately, no one knows when that may be
• Remind the client that waiting until his health fails means he may not be able to purchase LTCi at any cost
• Discuss the fact that LTCi premiums are based on age. Waiting just one year may mean paying six to seven percent more. Compare that with interest rates currently earned on retirement savings to illustrate the time to buy is now

If people aren’t eager to talk about long-term care, it may be because they don’t want to think of themselves as old or dependent upon someone else.

Here’s how to begin a conversation that can help them realize the importance of planning ahead.

Establish the Need
Most people believe they’re going to live a long life, but few stop to think what that may mean.

Point out that people who live a long life get old. And getting older means they may need help. Get them to talk about:

• Where they want to live
• Who will care for them

Discuss the Consequences
A long-term care situation doesn’t only impact the individual needing care. It also can impact the family. If you or someone you know had a long-term care experience, now is the time to share it.

Discuss how a long-term care situation can:

• Affect the caregiver through missed work, lost wages or exhaustion
• Cause family disagreements or hard feelings when one person assumes a greater share of care giving duties
• Deplete the family’s savings or require assets to be liquidated to pay for care

Present the Solution
Health insurance doesn’t pay for long-term care services. Medicare coverage is limited. And relying on Medicaid may mean spending down assets to qualify.

Stress that long-term care insurance may be the best way to help people:

• Get the care they need in the setting they prefer
• Avoid the risk of depleting a lifetime of savings
• Continue to live life according to plan

Prospective LTCi clients aren’t hard to find. In fact, you probably already know people who would be interested in talking to you about LTCi. Here are six good places to look:

1. Current Clients
The majority of LTCi buyers are between the ages of 55 and 64, so do a search for current clients who fall into this age group. Don’t overlook people who own businesses. They’re good prospects for multi-life LTCi. Just remember your best prospects are the people who already know and trust you.

2. Family, Friends, Acquaintances
People with family members, friends or acquaintances who needed long-term care services make good prospects for LTCi. According to a survey of Mutual of Omaha’s LTCi policyholders, 78 percent said they purchased a policy because they had first-hand knowledge of someone who struggled through a long-term care situation.

3. Centers of Influence
Forging relationships with attorneys and CPAs who will introduce you to their clients is another good way to find LTCi prospects. But don’t stop there. Look for other types of businesses that provide services to the groups you’re targeting. For example, home care agencies can help you connect with 50-somethings seeking care for their aging parents. Just remember to return the favor by referring your clients to these businesses.

4. Community Groups
If you already belong to social, charitable and business groups in your community, it’s time to start networking. Attend group events and get to know the members. Make sure they know what you do for a living and how you can help them plan for their long-term care needs.

5. Associations
Professional associations are always looking for new ways to provide benefits to their members. Ask your clients what associations they belong to. Then schedule a meeting with the executive director to talk about how you can help the association attract and retain members.

6. Children
Make a list of your current LTCi clients – people who had the foresight to plan for their future long-term care needs. Now go talk to their children. Chances are if the parents are planners, the kids will be, too.

People approaching retirement are still good prospects for long-term care insurance. According to the American Association for Long-Term Care Insurance (AALTCI), more than half of the people who purchase a policy are between the ages of 55 and 64. But there’s also a growing market of even younger buyers. Twenty-six percent of policies are sold to people age 45 to 54.

What’s prompting younger people to buy something they may not use for 20 or 30 years?

Personal Experience — Many people who purchase LTCi at a younger age are members of the “sandwich generation” — people struggling to care for aging parents while raising their own families. Being caught in the middle gives them firsthand knowledge of just how difficult being a caregiver can be. And they don’t want that for their own kids.

Cost of Premium — The premium for LTCi is based on the applicant’s age. That means younger buyers pay less. And even though they may pay for a longer period of time, it’s generally less expensive than waiting to buy. In addition, no one knows when the need for long-term care services will arise. So buying young means they’ll have coverage in place no matter when it’s needed.

Future Insurability — Younger buyers know that if their health were to change tomorrow, they may not be able to purchase LTCi at any price. Buying it while they’re young and in good health not only eliminates the concern about future insurability, it also may cost less since younger people have a better chance of qualifying for good-health discounts.

Pragmatism — The truth is an accident or prolonged illness can happen to anyone at any age. Today’s advances in medicine are saving the lives of people with catastrophic conditions like head injuries, heart attacks and strokes. However, these people still may need months or years of care. And the best way to help pay the bills for LTC services is with an LTCi policy.

So when you’re trying to find prospective clients for LTCi, don’t overlook people in their 40s and 50s. And don’t forget that you can offer them another important reason to buy — confidence. People who purchase a product they may not use for a decade or more need to know the company will be there when they make a claim. Mutual of Omaha has been keeping this promise to policyholders for over 100 years. Even in today’s uncertain economy, we continue to earn high industry ratings for financial strength and stability. Isn’t that the kind of company your clients are looking for?

Everyone loves a good story. When used in a sales situation, a story can grab people’s attention, change the way they think, even move them to act.

Why do stories work where other sales methods fail? If you’ve ever tried to make a sale by quoting statistics, you know statistics don’t sell LTCi. When people hear they have a 60 percent chance of ending up in a nursing home, they typically think they’ll be among the 40 percent who won’t. Touting product features doesn’t work, either. Bombarding a prospective client with details doesn’t address the need for LTCi and generally doesn’t result in a sale.

In her book, Stories that Sell: The Complete Guide to Success Story Marketing, author Casey Hibbard contends that even when you’re talking about products and services, people are more engaged when there’s a human element.

“Products and services don’t function on their own; rather, readers interact with them. People encounter challenges to overcome, become heroes, find solutions and ultimately triumph,” Hibbard said.

That’s why a simple story can be a powerful sales tool, and why you should be using storytelling to sell LTCi.

Remember when telling a story, your objective is to get prospective clients to imagine themselves needing LTC services and thinking about what they would do in that situation — who would care for them, where they would live, how they would pay. Finally, you want them to see that the happy ending in the story came about because of LTCi and reach the conclusion that purchasing a policy is a smart move.

If you’ve never sold long-term care insurance before or if you’re new to the market, you may think it’s a bit overwhelming. But the LTCi sale really isn’t all that complicated. You just need to know the basics.

What is long-term care?
Long-term care is a term used to describe a variety of services people need when they’re no longer able to care for themselves. This can be due to a prolonged illness, accident or the simple process of aging.

Most people prefer to get the care they need in their own homes, and there are many different types of long-term care services available. Some people simply need help with household tasks like housekeeping, shopping and meal preparation. Others require the services of a visiting nurse or therapist. If a greater level of care is needed, long-term care also is provided in assisted living facilities and nursing homes.

Why do people need long-term care insurance?
No matter where long-term care services are received, the cost can be high. The national average for home care services is approaching $40,000 per year (based on $19 per hour, eight hours per day, five days per week, 52 weeks per year). People who need nursing home care can expect to pay nearly $65,000 per year, and that’s for a semi-private room.

Unfortunately, when most people make plans for retirement, they fail to consider how they’ll pay for these expenses. And that’s where long-term care insurance comes in.

Why should you be selling it?
Your role as an insurance agent is to help people plan for the future and protect the things they hold dear. And that includes protecting their retirement nest eggs. Like other forms of insurance, long-term care is an essential part of a sound financial plan. Just as life insurance protects a family if the insured dies too soon and disability insurance protects the income of someone who is unable to work, long-term care insurance protects retirement savings from being depleted if the need for long-term care services arises.

Pre-packaged plans are the perfect place to start
If the thought of learning multiple plans and benefits seems overwhelming, consider the simplicity of Mutual of Omaha’s pre-packaged long-term care policies. Mutual Care 3 and Mutual Care 5 contain our most popular (and most frequently purchased) benefits and features. They even have inflation protection built in. And there’s a handy rate card that allows you to provide a quote without the use of software. Selling long-term care insurance doesn’t get much easier than that.

Once you’re comfortable selling these simple pre-packaged policies, you can move on to policies that can be customized for a client’s unique situation. Mutual of Omaha offers a complete portfolio of long-term care products that allow you to meet the needs of any client. Learn more at mutualcareplus.com. You can even order a starter kit so you can start selling right away.

We provide tips, tools and training you need
We also offer all the sales tips, tools and training you need to sell long-term care insurance. You’ll find our online resource center – LTC Connection – at mutualcareplus.com/ltcconnection. It’s filled with sales tips, training links and other tools to help you connect with customers.

So, if you’re just getting started in the long-term care market, you can count on Mutual of Omaha to help you every step of the way. From simplified products to training teleconferences, sales tips to our monthly e-newsletter, we make selling long-term care insurance easier than you think.

When it comes to planning for retirement, people typically know where they’ll get the money to pay for living expenses and many of the extra things they want to do. But all too often, they don’t devise a plan that addresses long-term care expenses. And that has the potential to derail their retirement dreams.

Consider the facts:

• Long-term care services are expensive. Based on Mutual of Omaha’s Cost-of-Care Survey, the national average for care provided by a home health aide can be more than $39,000 per year (based on $19 per hour, eight hours per day, five days per week, 52 weeks per year). The most costly type of care is provided in a nursing home. People can expect to pay more than $64,000 per year. And that’s just for one person. If both husband and wife need long-term care services, a retirement nest egg can be quickly depleted.
• Many people mistakenly believe their health insurance will cover their long-term care expenses or they plan to let the government take care of them. In reality, health insurance doesn’t cover long-term care. And the coverage provided by government programs is limited. For example, Medicare provides some short-term coverage simply to help people recover from an accident or illness. And while Medicaid does pay for long-term care services (typically nursing home care), it only pays for people who have no other resources. And that may mean spending down assets to qualify.

This can have a significant impact on a retirement plan
People who pay for long-term care services using retirement assets often must deplete assets that have been earmarked for other purposes. In addition, liquidating assets can trigger additional costs in the form of capital gains tax, income tax and potential surrender charges.

Long-term care insurance can help
Using a long-term care insurance policy can be a smart way to help people protect their retirement nest eggs. For a fraction of the cost of paying for long-term care services, they may be able to keep their retirement savings intact so they can use the funds the way they were intended.