HSBC Bank USA has signed on to sell SimpleCare, a John Hancock Life Insurance Co. product that makes it easier for bank to sell long-term-care insurance by removing some of the hassle.
HSBC has offered a more sophisticated, fully underwritten John Hancock long-term-care product for about two years, said David Fried, president of HSBC Insurance Agency Inc. in Buffalo, N.Y. Partly because of its complexity, traditional agents are not pushing long-term-care insurance to their customers, and that gives us an opportunity to break into it, Mr. Fried said. We can touch a lot of individuals.
He would not give HSBCs sales figures.
HSBC is one of four banks that offer variations of SimpleCare, said Fran Senner-Hurley, general director of the Boston companys financial institutions group. Last summer Wachovia Corp. became the first bank to offer it.
Its a real packaged product. There arent a lot of choices, Ms. Senner-Hurley said of SimpleCare. There are six medical questions, and if the applicant is in good health, theyll be approved right there.
Jesse Slome, executive director of the American Association for Long Term Care Insurance, in Westlake Village, Calif., predicts that banks will gravitate to products like SimpleCare.
Typically, an LTC sale takes 90 minutes to complete, Mr. Slome said. If the sale takes an hour and a half and two visits, there is going to be a problem, because neither the bank nor the bank customer is going to be willing to do that. Its too time-consuming and confusing a product.
But banks are the perfect venue for this sale, because they have the credibility and they have the relationship with the customer. Now its up to the providers to create simplified products for banks.
Ms. Senner-Hurley said products such as SimpleCare can help boost sales of traditionally underwritten LTC insurance.
There are some agents that will get used to long-term-care insurance with the simple version and then let go of the training wheels and sell the more complex products, she said. But there are also many that will stick with what they know and not go beyond the simplified product.
The HSBC version of SimpleCare benefits covers 100% of the cost of nursing home care, at a rate of $100 or $150 a day for two years, or 80% of the costs of home health-care coverage, also for two years.
There are drawbacks to this type of product, Mr. Slome said.
For instance, the lack of underwriting assures those that are healthy will pay more, he said. So if they comparison shop, and many of them do, there could be a problem. Theyll go in, get a quote, and see that they can get a better price elsewhere.
