On the Fifth Day of Christmas

Senior Insurance Training Services gives to you …

The Cost Frame

We have examined the Health Frame and the Care Frame of investigating your prospect’s need for long-term care.

In today’s five golden rings version of the fifth day of Christmas, we’re going to examine the Cost Frame. Just like in the original version, singing this verse is just a little bit longer than the rest. Without further adieu, five ….. golden …… rings!!!!!!

At this stage, the prospect should have described their frame of reference about the experiences of others regarding long-term care. They will have directly shared what caused the long-term care health problem and the where the care was provided.

They may also have shared some of their acquired knowledge and beliefs about long-term care. At this stage, you will continue investigating their experience with others by asking questions about the costs of care. You will also begin to uncover any misconceptions they have about the payment of long-term care.

Did they talk about the costs of care?
How much do you think they were spending?
How long did they carry this burden?
Were they able to meet their responsibilities?
What do you think the costs of long-term health care are today?
What do you expect those costs to be in the future?
What do you think the costs of nursing homes are in the area?
What do you think the costs of assisted living facilities are in the area?
What do you think the costs of community care services are in the area?
What do you think the costs of home care services are in the area?

Get the prospect thinking about long-term care economics. You don’t need to present a lot of statistical information here, but be sure to give them a context for the costs of care.

Once you have established an understanding of the prospect’s knowledge regarding the costs of long-term care, you must now learn their beliefs concerning the payment of long-term care costs.

Do you know how they paid for their care?
Did they have health insurance? Did it help with their long-term care costs?
Did they have Medicare? Did that help with their long-term care costs?
Do you think they had a Medicare Supplement policy? Did that help?
Did they need to go on Medicaid? Did they need to “spend down” their assets?
Did they receive any other government assistance, such as from the VA?
Did their family help out with the costs of their care?
Did they pay for the care from their personal assets?
How did their long-term care costs affect their lifestyle?
Did they have any type of insurance to help with the cost of care?
Do you think they would have benefited from protection against this event?
How do you think they felt about their situation?
What do you think they would do differently if they had the chance?

Get the prospect thinking about sources of payment. You are not presenting misconceptions regarding Medicare and Medicaid. You just want to learn what they consider as possible solutions.

Now Make It Personal

If you have done your job, the prospect has confirmed that they may need long-term care and that they may need outside assistance to provide for their care. Now, you must discuss the issue of the costs of care and how to pay for that care.

Current Cost Questions

What does long-term care cost?
What are the nursing home costs in the area?
What are costs of other long-term care facility in the area?
What are the community care service costs in the area?
What are the home care service costs in the area?

Future Cost Questions

Do you know how rapidly health care costs are growing?
What do you expect long-term care to cost in the future? Five years from now? Ten years? Twenty years?
What bothers you most about the cost of long-term care?
How can you pay the costs of long-term care?
If you were beset by a long-term illness and needed long-term care starting tomorrow, how would you pay for your care?

Who Pays Questions

Do you have major medical insurance? What long-term care costs are covered?
Do you have Medicare? What long-term care costs are covered? Does Medicare pay for custodial care?
What is the maximum number of days Medicare will pay 100% of approved expenses in a skilled nursing home?
What long-term care expenses will your Medicare Supplement policy cover?
Will Medicare Supplements cover nursing home costs that were not approved by Medicare?
How do you feel about Medicaid? Are you willing to go on welfare?
Are you willing to “spend down” your assets to cover the costs of your long-term care expenses? If so, why?

How Will You Pay Questions

The average annual local cost of one year in a nursing home is over $100,000 per year nationally.

How many years could you afford to personally pay for care?
What is your average monthly income?
What is the approximate value of your savings, investments and home?
If you are going to use your personal assets to pay the costs of long-term care, would this decision impact your spouse’s lifestyle?
How long could you afford to pay for long-term care services without affecting your family’s lifestyle?
If you are going to use your personal assets, would this decision impact your children’s inheritance? How would this affect you? Why?
How long could you pay for a nursing home stay before you would have to sell your home? Is protecting your assets important to you? Why?
Have you protected yourself from the major retirement financial risks of a home fire, automobile accident or extended hospitalization?
Does protecting yourself against a major financial risk such as long-term care make sense to you? Why or why not?

YOUR PROSPECT MUST ACKNOWLEDGE THE POSSIBILITY OF A MAJOR FINANCIAL IMPACT ASSOCIATED WITH A LONG-TERM HEALTH PROBLEM

Tying a Bow around the Need

You must now confirm the need for long-term care with the client. You must ask the prospect to once again agree with the following points:

Do you agree that you may need long-term care at some point in the future?
Do you agree that if you need long-term care services, you may need outside assistance?
Do you agree that if you need long-term care services and outside assistance, your current insurance and government programs provide inadequate protection?
Do you agree that if you need long-term care services and outside assistance, the best course of action is to insure against such a major financial risk?

Again, the prospect must agree to these points. If they do not agree convincingly, you must ask questions to understand their hesitation, address their concerns and confirm their agreement once again before you move forward. You may need to ask specific questions, particularly in the area of paying for long-term care, such as:

Do you agree that your health insurance will not pay all of your LTC costs?
Do you agree that Medicare will not pay all of your LTC costs?
Do you agree going on welfare is not a solution to the problem of LTC?
Do you agree using your personal assets to pay for long-term care is not the best use of your life savings?

CONFIRM THE PROSPECT’S AGREEMENT THAT THEY MAY NEED LONG-TERM CARE INSURANCE BEFORE YOU PRESENT ANY SOLUTIONS!

In addition, you must slow down before you move forward to determine what they are thinking, how they are feeling and what else they are considering at this point in the interview.

You must continue to confirm the client wants to move forward before you present any solution.

Why is making a decision about long-term care important to you today?
Does investigating your options regarding long-term care insurance sound like an appropriate course of action?
Does this course of action feel right so far?
What else should we discuss about long-term care before we discuss protecting you and your family?
What information do you need to see to reach a decision?

This is also an excellent time to ensure the appropriate decision-makers are present for the conversation. The last thing you need to hear at the end of the presentation is “I need to discuss this with my children or my attorney.”

Ask the prospect directly if anyone else would be involved in their decision. If the answer is “yes” you must either get those people in the room or schedule a second interview before you present your solution.

Gift Wrapping Five Golden Rings

There is a lot of ground to cover in exploring the Cost Frame.

If you ask all of these questions as presented here, your prospect will begin to feel as if they are being interrogated as a criminal by a detective. Don’t do that!

You need to weave through these topics conversationally to uncover their misconceptions and help them understand the cost burdens associated with their potential need for long-term care.

They don’t need to pass a test on what Medicare pays or how they will qualify for MediCaid (Medi-Cal). They simply need to acknowledge that Medicare isn’t a payor option and Medicaid is only a payor of last resort.

How you help them get to those conclusions is a matter of personal style. Be a helpful consultant to guide them to these conclusions.

You will make the sale when the prospect understands that it will cost more to do nothing about the problem than to do something about it.

Ben Feldman