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Are We Trying To Catch Flies With Salt?
by Phyllis Shelton

You don't have to be from the country to know that the way to catch flies is with sugar, not salt.

You've been hearing the criticism that LTC sales have been slow to take off. Market penetration is still well under10% over three years after Congress sent a clear message to the American public with HIPAA of 1996 that there isn't enough money for a social program to pay for LTC. This law could have done a much better job on the tax incentive portion, but the message still went out that government wants as many people as possible to take personal responsibility for their LTC by purchasing a private LTC insurance policy.

Maybe the critics have a point. Why aren't people lining up to buy this stuff  if it's as needed and as great as we advertise it? Could it be that we are trying to sell the wrong thing, like trying to catch flies with salt, not sugar?  Could it be that we in the industry are still laboring under the two biggest  misconceptions about this product:

1) that it's NURSING HOME INSURANCE (where's the Alkaseltzer, Margaret?); and

2) that the #1 purchasing reason for LTC insurance is ASSET PROTECTION, when survey after survey tells us it is to preserve independence and choice?

To respond to Number One Huge Misconception, why would anyone want to spend  $4,000 a year (or $400 a year or $4 a year) to go to the last place on earth anybody wants to go to? The truth is that LTC insurance may be the only thing  that keeps us out of a nursing home by providing our family with money to pay for help to keep us at home. No spouse, daughter, son, daughter-in-law who's a nurse, son-in-law who's a physical therapist or any other primary caregiver can take care of us 24 hours a day. But with an 8, 10, or 12 hour shift of home health care, staying home becomes more of a reality by giving our primary  caregiver time off to rest and have a life with his or her own family.

Or do we stop to think that LTC insurance may be the only way we can afford a  ticket to the nicest assisted living facility in our area? I do believe that some people will live much better in assisted living facilities than they've ever lived at home!

Another way to look at Number Two Huge Misconception is that preserving  independence and choice translates to purchasing ACCESS TO QUALITY CARE , which  everyone wants and longs for. What would happen if we stopped using asset protection as the main motivator and starting pushing access to quality care as our lead product?

The way I see it, pushing asset protection is like trying to push the second best product over the #1 product with the highest value for the money. Think  about it. People don't worry so much about losing assets, because they perceive a low risk of such a thing actually happening. They falsely believe that either  existing social insurance (Medicare) or welfare (Medicaid) will bail them out.

People purchase insurance if they perceive a risk, real or not. What matters is their perception, not the magnitude or reality of the risk. Real risk, if unperceived, will not impel people to buy insurance. Perceived risk, real or not, motivates people to insure.1 All you have to do is look at homeowners and auto insurance to see that. The perceived risk of either a house fire or an automobile accident is much greater than the LTC risk, so people must insure against those losses while overlooking something that will happen in some form for some length of time to almost half of us!!!2

Besides, it's human nature with a lot of people to be modest about having  assets to protect because they don't want to create any impression that they might have something worth taxing. "Assets, heck, no! The government's done got all our assets!" But talk about quality of care and the reaction changes in a hurry. "Nothing but the best care for my family - that's what I'm paying for", and the pride embedded in that statement illuminates the face of our prospect.

Ready to try a little sugar instead of salt on your next five appointments?  And use REAL sugar, not Sweet n Low or Equal. BE SINCERE - quality of care IS your best product ("and oh by the way, Mr. Jones, this product will also preserve your assets for your children, grandchildren, church, etc." or "and oh, by the way, Mr. Jones, this policy will even pay for nursing home care if you  should need it as a last resort, imagine that!") LTC insurance may in fact be the only thing that makes nursing home the LAST resort, not the FIRST resort.

So how about leading with our best deal for a change?

1Moses, Steve. "The Myth of Unaffordability", Center for Long-Term Care Financing, Seattle, WA
2 Health Insurance Association of America LTC Insurance Buyer/Non-Buyer Surveys, 1991 - 1996.

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