Canada’s aging population presents opportunities for financial advisors to grow their businesses through the sale of long-term care insurance (LTC), says Stephen Frank, vice president of the Canadian Life and Health Insurance Association Inc. (CLHIA).
Frank estimates that about 20% of Canadians will need some form of LTC as they age. “That’s a fairly high percentage,” he says, adding that it is your role to help your clients understand that they should be prepared to foot some of the bill for the high medical costs that come with getting old.
The Economics of Loyalty, the report from a recent study by Advisor Impact Inc. and the Investment Industry Association of Canada, confirms that LTC is the biggest “organic growth opportunity” for advisors.
Frank offers some tips on how you can add LTC insurance to your service menu:
> Be proactive
As with critical illness and disability insurance, it’s important to discuss LTC with your clients early in the relationship.
“The challenges are similar,” Frank says. “If you wait until your clients are in their 50s or 60s, it will be quite expensive and that can be a barrier for people.”
Many baby boomers, he says, don’t start thinking about LTC until their elderly parents begin to incur some of the costs of getting old. That, Frank says, can be too late for some clients.
He recommends broaching the topic in a way that’s similar to the approach you would take in bringing up registered education savings plans with clients who have young children. Focus the discussion on the clients’ needs, he says, rather than their fears.
> Share the facts
A 2012 policy paper released by CLHIA estimates that the cost of providing LTC to baby boomers over the next 35 years will be $1.2-trillion. Current government programs will cover only about half of that amount.
“We think there is a lack of awareness around the need,” says Frank.
Clients should be made aware of this shortfall and what they can do to close the gap. Demonstrate how LTC can offer clients peace of mind.
> Start slowly
Although the facts indicate an overwhelming need for LTC, start slowly in incorporating these products into your practice. Growing through LTC will be a long-term process.
LTC is not yet as popular in Canada as it is in the U.S. Many Canadians, Frank says, wrongly assume that all medical bills will be taken care of because of Canada’s universal health-care system.
Start by making LTC “just another pillar” in your practice, Frank says, until you know there is sufficient demand from your clients.
Next: Growing with estate planning.
For more on LTC, check out our Special Feature Contemplating Care.