Broadtower Base

Barry Fisher

Aggregation Of Marginal Gains – The 1% Difference

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Recently, I came upon a concept that can help anyone’s sales performance not to mention their lives in general. It’s a training idea that has become quite prominent in Great Britain ever since Team Sky became an international powerhouse in cycling, winning both the 2012 and 2013 Tour de France. The aggregation of marginal gains is elegant in its simplicity and powerful in delivering results.

Sir David Brailsford (it seems that everyone becomes a “Sir” in Britain once they’ve achieved some degree of fame) became the coach of Team Sky, the national cycling team of England, in 2010. Never a powerhouse in this popular sport, Brailsford believed his team could overcome the trend towards doping and become champions by focusing on the small details of their craft and improving each one by 1%. Small changes in nutrition, health habits, tyres (English spelling) and clothing would aggregate into big gains. Within three years Team Sky achieved Tour de France and Beijing Olympic victories.

I was made aware of the concept of aggregation of marginal gains in a brief presentation on practice management. When I did a web search of the term, I discovered that the theory has become very popular in British business circles as a successful training model. Small positive changes in habits, communications and methods can reap big benefits for any business or sales professional.

The key take-away of this concept is that you don’t have to make big changes to achieve new levels of success. Small incremental upgrades to your thinking, habits and business offering can add up to major increases in your bottom line.

What does this have to do with long-term care insurance marketing? Over the years, I’ve discovered that BGAs and agents who consistently and persistently add long-term care planning to their day-to-day marketing conversations will see improved sales. Here’s an example: a few years ago a broker in Southern California with a multi-line agency, P & C, life and health insurance and investments, added the following question to his daily conversations with clients; “have you taken care of your long-term care planning yet?” This small change catapulted our agent to long-term care insurance sales success. He’s became a consistent top producer of traditional LTCi and now he’s embraced linked products.

Brokerage general agents have more long-term care liquidity options in their product portfolios than ever before. Add the LTC planning conversation to your day-to-day discussions with agents and advisors. This small change will create more sales and add to your bottom-line.

Transamerica Consumer Awareness Video – Long Term Care Planning

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Long Term Care Awareness Month is upon us. With national media attention there’s no time like NOW to encourage your agents and advisors to ask an important question of their clients and prospects; have you taken care of your long term care planning yet?

Transamerica has produced a short, hard hitting consumer awareness video that you should consider sending to your entire contact list.

Click Here to View

Broadtower Insurance Solutions, Inc. is proud to represent the best in long term care planning solutions; traditional and linked. Please contact us to learn how we can help you make long term care insurance a significant profit center in your agency.

Easy Answers

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We are all of course guilty of succumbing to the temptation of embracing easy answers. However, sometimes it seems our own profession may have a particular affinity for simplification excess.

This is evidenced by a statement I heard recently from the committee examining the wide, and growing world of Combo Products. “Hybrid, Linked and Combo products are the fastest growing segment of both life and long term care insurance.” When you add asset based long term care sales we have a several billion dollar industry with stand- alone LTCI sales accounting for only about $500 million. The interesting question is how much of the current life production is written with some form of chronic illness benefit? The current “guess” is approximately one third. This number will continue to grow as more companies move aggressively to provide some form of living benefit.

These riders are being produced across a very wide spectrum of quality and intent. I am concerned that many may not clearly understand what was sold or in some cases automatically included in their life policy. I am also concerned that consumers may not clearly understand what they bought..

Any leveraging of risk is of course preferable to ignoring the problem. It is also very helpful that we have so many more choices.

Here are a few of the questions that come to mind:

  • How can you sell any version of Long Term Care protection and not be trained or certified to have that conversation?
  • If you offer a benefit do you not have a responsibility to at least offer the lowest net cost to pay for the risk?
  • Did you evaluate 1035 opportunities before recommending any particular new coverage?
  • Did you clearly explain the difference between LTC ‘health’ riders and LTC ‘life’ riders?
  • Where do you place Long Term Care ‘Planning’. Is this a Health or Estate or Asset Management planning process or some mystical combination of all the above?

The ability to conveniently address more than one need for protection with one sale has always been attractive. The current popularity of this approach as it relates to LTCI however requires an understanding that the temptation of easy answers must be resisted. There is no one right answer, each situation is unique. Begin as usual with a careful review of what is already in place. What could be exchanged at what cost? How best do you enhance LTC protection and what is the net cost of those recommended options? We have not found a new, easy answer or an easy way of avoiding a more comprehensive conversation about all the insurance options. The truth is complicated and requires training in all the available solutions. The best answer may actually require a little of this and a little of that. Learn to Mix and Match with confidence and enthusiasm A frank and open analysis of all the good and all the bad of all the choices is best. Companies, agents and consumers need to abandon the quest for that “Easy” red button. Other than that I have no opinion on the subject.

Tax Deductible Premiums And Tax-Free Benefits For Business Owners

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If you’re in the group health marketplace or work with business owners, you’re getting ready to bring “news”: good, bad or indifferent, to your clients regarding ACA’s impact on their lives in 2015.  We understand your pain and theirs; we’re business owners and the impact on us and our employees in the past 18 months has been mostly unpleasant.

That being said, you can bring good news to business owners who are concerned about preserving their retirement income and their assets.  As we’ve said many times: traditional long-term care insurance benefits are always received tax-free; and for business owners the premiums are partially or fully tax deductible.  The benefits of this should be obvious.  Business owners can protect their income and assets with highly leveraged, tax-deductible dollars.  This is a great message to bring to clients who are getting squeezed by higher health insurance premiums and taxes.

This approach works for sole proprietors as well as for businesses with W-2 employees.  If there are at least three employees (including the owner) they get another advantage: simplified underwriting!  Your eyes are not lying!  Virtually every employee working in a company with three or more lives will qualify for long-term care insurance (ages 65 and younger), if they can answer “no” to a series of knock-out questions on a simplified application.

Here are the rules in a nutshell:

  • LTCi is available for groups of three employee lives and up.  The rules are more flexible as the groups get larger.
  • Groups 3 – 9: minimum of five approved applications, including spouses, to get Simplified Issue (“SI”).  Employer pays 100% of a defined benefit design for all applicants.
  • Groups 10 – 74: minimum 10 approved applications to get Simplified Issue.  Employer must contribute at least $25 or 25% of defined plan design monthly to get Simplified Issue. Spouses can qualify for SI if employer contributes for them.
  • Groups 75 – 499: can be voluntary, no employer contribution required; minimum 10 approved applications to get SI
  • Groups 500+: voluntary, 25 approved apps to get SI
  • All multi-life groups get the multi-life premiums; employees or spouses for whom employer contributes the minimum for each group size, get an additional 5% discount.
  • Additional discounts apply in most states for having a spouse/partner whether they apply or not, and a larger discount if spouse/partner applies and is accepted

The insurance company for this excellent simplified underwriting program is LifeSecure, a wholly owned subsidiary of Blue Cross/Blue Shield of Michigan.  The benefits are easy for consumers to understand and the rates are very competitive, particularly in California.  It is also available to individuals on a fully-underwritten basis.

In today’s uncertain economy, you have a duty to discuss the need for long-term care planning with every client.  Tax-free benefits are always in play for any consumer who purchases a traditional long-term care insurance policy.  Tax-deductible premiums are of great value to nearly every business owner, and simplified underwriting for employer groups with three or more employees sweetens the pot.

Take this good news out to your clients; they’ll thank you for it.