Updated: Sep 24, 2020
A surprise assault on a weakened population is an equation for disaster. In our own little corner of a worldwide conflagration, our direct relationship to those most vulnerable cannot be lost on any of us. The simple truth is we have struggled valiantly to defeat or ameliorate inferior or discounted institutional care. If circumstance demands custodial assistance outside the home, we have tried to make sure there were funds available to maximize the level of care. At this moment a return to normal is a when not if. Our 20 year campaign to blunt the force of a potential catastrophic risk will surely return with a new urgent momentum, insight into the cost of physical isolation and a recognition of the health care vulnerability of those most in need of care.
How could this historical tragedy have arrived at a less opportune time? Although this column has a tendency to overuse metaphors, analogies, parables and euphemisms, it is impossible to ignore the apparent similarities between our current national health emergency and the readiness of extended care indemnification. We are unprepared.
Let’s begin with the fact that we have a highly segmented market in terms of product and solutions. There is still prevalent product misogyny. It seems too many are enamored with the mythical transactional “Easy Button.” All too often once an advisor or, for that matter, distributor becomes familiar and comfortable with a given product genre approach to the risk, that solution becomes a panacea to all requests for protection. In my humble opinion may I explain again that all the good and all the bad of all the choices demonstrates a much safer and transparent fiduciary responsibility.
To suggest there may be confusion in the field about virtually everything associated with extended care risk abatement would be a cosmic understatement. The oldest mystery is how did this progressive conversation initiate itself? Who actually called this meeting to evaluate risk and determine an appropriate response? Unfortunately we know from multiple consumer surveys it almost always begins with the consumer not the insurance advisor. What we have of course learned is that the knowledge of the need is laying there just below the surface. It is however still financially nebulous, structurally misinformed and governed by personal experience with caregiving. If a direct route to this sale were a Google Map, I would find myself perpetually lost in the middle of an obscure corn field. Maybe if we could filter the requested journey to take only main, well marked Interstate, avoid any current traffic wrecks and boondoggle projects under construction, we might be more successful.
The problem begins with genre identification. Perhaps it’s simply the mushrooming plethora of product choices. Much more likely it’s the immediate and highly negative knee jerk reaction to anything “long term care.” The market has moved on and the previously established agent base has been drastically eroded. The perfect storm of rising premiums, onerous rate increases, and restrictive underwriting has taken its toll on those willing to help.
What follows is sheer speculation. Unfortunately, there is no definitive producer sales analysis available to validate our suspicions. The following is my gut intuition and anecdotal perceptions:
Stand-alone LTCI aficionados are still correct. Directly addressing a contingent liability with a contingent solution remains good math.
Our sales to the affluent market may have held us together but concentrating our attention on those who could probably self insure if they wished is not a formula for lasting success.
• Your choice of primary presumed purchase motivation can’t help but point you to a particular siloed approach.
Is the potential sale an intentional response to a family care experience opening up a new and broader horizon of possible solutions?
Is the long term care/chronic illness sale governed by a coincidental opportunity? Is this just a great bonus conversation? In other words, was there a life insurance need already on the table and what philosophy of that life transaction was at play—death benefit or internal account value performance?
Does the sale boil down to ROIs providing more powerful investment strategies?
Maybe the sale is permanently contaminated by well-known concerns and frankly indigenous to our market. LTCI has left us an unappetizing legacy...ringing in our ears should be the valid concern: “Can you actually get it issued and specifically are the premiums and benefits guaranteed?”
I have started to again carry a Rand McNally Atlas in my vehicles. Google or SIRI can never give any context or more personally pleasing options to my journey. It only takes me from one finite point to another. It excludes all esoteric or scenic alternatives.
After this temporary and historic delay in America’s future, we must be prepared to build a better focused response. The spotlight is burning brightly on America’s greatest underinsured risk. The residue of this artificially imposed sabbatical should be a better understanding of an even more visibly precarious population. We are all witnesses to a worldwide tragedy painfully exposing a vulnerable cohort based on advanced age and diminished health status. We must begin now to sort out this marketing mess and bring some order to the disarray of the past. We must finally stand ready to attack this risk with a new dedicated commitment to a much larger market. Our mantra and our mission remains constant: Those most in need now and in the future.
Other than that I have no opinion on the subject.
As seen in Broker World Magazine.