Undying thanks go out to Claude Thau, Thau, Inc./Target Insurance Services, and the great folks at Milliman, Dawn Helwig, Allen Schmitz, Nicole Gaspar and Taylor Schmidt, for their tireless work in producing both last month’s 2016 Long Term Care Insurance Survey and this month’s 2016 Analysis Of Worksite LTC Insurance. Broker World has been truly blessed to be able to provide the industry’s most comprehensive studies of LTCI products and trends for 18 years now, and it is only through the efforts of these fine champions of our industry that we are able to be of service to you, our readers, in this manner.
It is perhaps an unwitting philosophical disservice that the LTCI study appear in this issue, with a focus on brokerage niche marketing. Included are four fine articles about various niche products and niche marketing approaches, but their proximity to a long term care insurance study now tilts this column into further discourse on a seemingly impossible dream. Panzamonium.
Whether I wear the mantle of the witty squire or that of his delusional knight is problematic and presently beyond my powers of introspection.
BusinessDictionary.com defines niche marketing as “concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not ‘exist’ but are ‘created’ by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a large pond.”
Therein lies the disheartening paradox. Our industry is behaving as though LTCI, and further, DI, are niche products, and dedicated LTCI and DI product champions are niche marketers. It is my perception, and that of many of my industry friends, that brokers who diligently pursue providing these products to their clients are comparatively few in number—one might think this would label them big fish? Yet their target market is vast—an incredibly large pond. Virtually everyone in the country who: Is employed or has an income and is not barely scraping by to provide basic necessities (food, shelter, clothing); Is not so vastly wealthy that they cannot possibly exhaust their resources in their lifetime; Has not gained irrefutable knowledge of their future sudden demise without need of services; Doesn’t give a hoot if they become a pitied and resented burden on their loved ones; Has a medical condition that definitely eliminates them from obtaining any type of LTCI or DI policy; Has absolutely no legacy ideals or desire to benefit their heirs. I’m sure there are a few others. But it’s these people who fit the description of a niche market—a small but specific and well defined segment of the population—not the eligible customers for DI and LTCI protection.
So how does the brokerage industry rate on “…the needs, wants and requirements that are being addressed poorly or not at all by other firms?” On “…developing and delivering goods or services to satisfy them?”
Facts from LIMRA for Disability Insurance Awareness Month:
• Over half of working Americans worry about the effects of a disability. Among younger workers the percentages are higher.
• The average worker faces a 3 in 10 chance of suffering a job loss lasting 90 days or more due to a disability.
• More than half of all personal bankruptcies and mortgage foreclosures are a consequence of disability.
• Seven in ten working Americans understand the importance of disability insurance, yet only one-third have coverage.
Facts from LongTermCare.gov:
• 70 percent of people turning age 65 can expect to use some form of long-term care during their lives.
• Women need care longer (3.7 years) than men (2.2 years).
• One-third of today’s 65 year-olds may never need long-term care support, but 20 percent will need it for longer than five years.
According to the American Association for Long-Term Care Insurance, 2014 LTCi Sourcebook, only 8.1 million Americans were protected with long term care insurance.
Those morsels indicate some pretty darn panoramic niches.
With only a figurative handful of carriers serving the LTCI and/or DI markets, and relatively few fish earnestly serving the need, the industry as a whole is shirking its responsibility to deliver DI and LTCI risk abatement solutions to American consumers as a whole. But perhaps more disheartening (and shaming) are the multitudes of eligible customers in brokers’ client lists who have not been legitimately informed of the risks they face, the benefits that are available, the true need for coverage and the full range consequences they face by refusing to pursue coverage. It should be the ethical if not moral duty of all financial professionals to diligently pursue DI and LTCI solutions for their clients—those same clients whose premiums provided countless hot meals, season tickets, fancy cars, nice homes, memorable vacations, designer clothes and nice schools for the families of insurance professionals they trusted to provide the coverage needed to protect their own families.
Combo policies, hybrids and linked benefits are undeniably helping, but the numbers of the underserved are still staggering. This problem is no windmill. [SPH]
