Beginning next quarter, Bank One Corp of Chicago plans to enlist its 650 series 7 salespeople in selling long-term health-care insurance.
Though no carrier has been selected, Michael Reed, president and chief executive of the banking company's Cleveland-based Banc One Securities Corp., said he already knows his target markets: young professionals, for whom retirement is a long way off, and retirees who are planning for the near future.
"You've got an aging population, and people living longer," Mr. Reed said.
"We mean to raise awareness of this situation and offer some solutions."
Bank One is conducting due diligence to select a carrier, Mr. Reed said.
Premiums for long-term health insurance typically range in price from a few dollars a month for a younger customer to $20 or more if the policyholder is a senior citizen. The process of receiving a policy starts with a doctor's report and includes a check into age, family history, and lifestyle. The policies can eventually pay for nursing home care, at-home nursing care, or short-term after-hospital assistance.
Mr. Reed said the product may require more of a sales push than other investment offerings, because of the necessity for customer education.
"I don't think people are as in tune as they should be about solutions to their longer-term care," he said.
Bank One will market the product to people who have already bought investment products from the company, Mr. Reed said.
The brokerage will also seek a new customer base through mailings and seminars.
Natasha Haase, senior analyst with Oliver, Wyman & Co. in New York, said Bank One is moving in the right direction by offering a nonmainstream insurance product.
"A lot of people are starting to prefer one-stop shopping and want depth of product from their financial institution," she said.
But, the product may not be an easy sell, Ms. Haase said. "The problem is getting people to buy it, because there are a lot of offerings competing for their dollars."
The introduction of long-term health-care insurance is intended to help Bank One offer a more diversified product mix this year as the brokerage looks to achieve $5 billion of investment product sales, which would represent a 25% increase over 1999.
"We're looking for even bigger and better things this year from a more robust group of products," Mr. Reed said. "There are still many people in our customer base with a need to invest."
All told, the company offers investment products through 3,650 brokers, including 3,000 series 6 branch employees, at 2,000 branches.
"We take a very practical approach," Mr. Reed said. "We try to make sure customers are well diversified between cash, stocks, and bonds."