Black Holes

black hole

Several prominent scientists recently shared the 2020 Nobel Prize for Physics. They were rewarded for helping to understand the exotic and mysterious phenomena of Black Holes.

  • “The general theory of relativity leads to the formation of black holes.”
  • “That an invisible and extremely heavy object governs the orbits of stars at the center of the galaxy.”

Their research has helped to reveal the darkest secrets of the universe. A black hole creates a gravitational pull that will not even allow light to emerge. The frequent readers of this column already know where this is heading. My partner and I have had numerous reflective conversations concerning our occasional combat fatigue with trying to illuminate the reality of the long term care “insurance” conundrum. Maybe it’s simply our own version of PTSD from the continuing battle to protect as many as possible from the potential financial implosion caused by an extended need for care.

It seems that light cannot escape the gravity of consumer resistance. It sometimes seems no matter how we approach the sale there is lurking in the background powerful calcified negative energy denial. The problem of course is that the war must go on. The reasons for the emotional and fiscal conflagration have not been mitigated. A satisfactory insurance solution that can create sufficient critical mass to make a real difference is still somewhat illusory. Whatever momentum we may have had 15 years ago has been decimated by rate increases and carrier exits. Exactly what happens before matter falls forever back into a black hole in our own Milky Way galaxy is shrouded by a cloud of star dust we have simply not been able to penetrate. In other words, we know what happens and does not happen in terms of a cosmically permanent result. We do not know why.

We keep trying to peer through that cloud to better understand. We try what could best be construed as a process of elimination with perceived consumer awareness and preference. It must be about price. Well, not exactly. It must be about benefits. Well, not exactly. It must be about perceived value. Well, not really. It must be about consumer awareness of the risk. Yes to awareness, no to buying action. We have simply been unable to uncover and free the light of a solution from the gravity of the problem.

The uncertainty of COVID-19 should have lit a beacon in a darkened night sky. Mortality is higher than expected over all; the number I have seen is 20 percent above projected. There is no mystery as to the source nor is there any confusion as to where the virus has hit the hardest. We have witnessed a new and ominous definition of co-morbidity and mortality not present in any actuarial product design. Time to take a deep breath as well concerning the long term effects of today’s decisions. The overall impact on future product design and satisfactory sales results is a giant unknown. While our physical health remains governed by adequate safety protocols, we should recognize the potential future concerns regarding mental health as well. In a recent NAIC article the well known underwriter Hank George suggested the pricing residue of the pandemic could lead to “an unprecedented, self-imposed underwriting apocalypse.” As you can already see frequently in the press there is considerable debate on what the pre-existing condition status will be for COVID survivors.

The pandemic has changed us permanently. The economy will hopefully continue to bounce back. Our approach to the sale, the companies’ approaches to the risk, and the consumer’s willingness to take action, may return to some version of so-called normal. But it will not be the same. Not only product but sales themselves will operate on a hybrid basis—part virtual, part personal. Zoom is here to stay but, when allowed, so is a personal close with a firm handshake or a small hug. Let’s hope that the lessons exposed by the virus can also finally release some light on more Americans willing to take actions now to protect their futures.

The Crusade to avoid the now painfully obvious shortcomings of institutional care and the capricious nature of mortality must now take on a new sense of urgency. This is protection which cannot be marginalized any longer.

Other than that I have no opinion on the subject.

Ronald R. Hagelman, CLTC, CSA, LTCP, has been a teacher, cattle rancher, agent, brokerage general agent, corporate consultant and home office executive. As a consultant he has created numerous individual and group insurance products.

A nationally recognized motivational speaker, Hagelman has served on the LIMRA, Society of Actuaries, and ILTCI committees. He is past president of the American Association for Long Term Care Insurance and continues to work with LTCI company advisory boards. He remains a contributing “friend” of the SOA LTCI Section Council and the SOA Future of LTCI committee. Hagelman and his partner Barry J. Fisher are principles of Ice Floe Consulting, providing consulting services for Chronic Illness/LTC product development and brokerage distribution strategies.

Hagelman can be reached at Ice Floe Consulting, 156 N. Solms Rd., New Braunfels, TX 78132 Telephone: 830-620-4066. Email: