Friday, March 29, 2024

Finding The Right Fit For Your Client’s Long Term Care Planning

Overcoming obstacles and objections you may face is key when discussing long term care planning with your clients. Once your client is on board, it is important to help them choose long term care coverage that best fits with their overall financial strategy.

Helping clients understand long term care insurance
Common questions that clients may have are:

  • How much is long term care insurance?
  • What does long term care insurance cover?
  • How are long term care benefits paid?
  • How does long term care insurance work?

How much does long term care insurance cost?
The cost of long term care coverage depends on factors including age, sex, and health of the insured as well as planning details such as the amount of coverage, whether inflation is added, and whether or not the long term care plan will be paired with a financial product. The variety of products available today can provide an opportunity to match a policy with a client’s budget and other potential planning needs.

What a long term care policy covers
While basic coverage is universal among most policies, it is important to read the contract for small details and variances in coverage. Contractually, all policies cover the basics such as:

  • Home Health Care
  • Assisted Living
  • Adult Day Care
  • Nursing Home Care

However, the type of long term care benefit payment model the policy uses may also help to establish what other long term care services the policy benefits can be used for, and/or how much of the benefit dollars will be available to be spent for a particular type of care service.

Long term care benefit payment models
While there are many variations, long term care benefits models generally fall into two categories—reimbursement and cash indemnity plans.

Reimbursement
These policies only reimburse the actual cost of qualifying care, up to the issued policy benefit amount. Bills and receipts must be submitted each month to determine the amount of reimbursement. Keep in mind that reimbursement policies may have limitations and do not cover all expenses a person may consider necessary for their care, thus there may be items or services on a bill that will not qualify for reimbursement (i.e. hair care from the facility’s beauty parlor, massage therapy, or upkeep of home care is being received in). Such expenses will have to be paid for out of pocket.

Cash Indemnity
These policies are generally more flexible than reimbursement plans. Once payments begin, there is no monthly paperwork required and the full available long term care benefit is paid each month. The insurer places no restrictions on how long term care benefits are used for care. Benefits can be spent on whatever care services are desired. This would include using 100 percent of the long term care benefits to pay for unlicensed care (including immediate family members) as well as to pay for ancillary care needs such as prescriptions, home maintenance, laundry, etc.

Making the most of your long term care planning
Choosing the best coverage for your client’s situation is a multi-step process. It starts with looking at his overall financial strategy, both current and future. This would include:

  • Assessing whether additional life insurance or retirement planning is needed.
  • If legacy planning is desired (whether family legacy or charitable giving).
  • Financial protection of a surviving spouse.
  • How much income or which asset is available to fund the long term care coverage.
  • What long term care benefit model would be preferable.

Once you have determined these planning points, you can move forward with product choice. There are several ways to fund for a long term care event, including:

  • Traditional long term care insurance.
  • Long term care rider on life insurance.
  • Linked benefit (Hybrid) long term care coverage.

Each one of these solutions works differently, addresses different concerns, and provides its own unique way to pair with an overall financial strategy. These differences may even affect when to buy long term care insurance.

Traditional long term care insurance
This policy only pays if a qualifying long term care event occurs. While often providing the most coverage for the least cost, premiums are not guaranteed. There may be more flexibility in choosing options such as elimination periods, benefit periods, and inflation. With most carriers, only lifetime premium payment schedules are available and, generally, these policies only pay long term care benefits by reimbursement.

This solution may be valued by people who:

  • Do not want or need life insurance.
  • Want more customization of benefits.
  • Understand that the policy is essentially “use it or lose it” regarding premiums paid (a few companies offer riders for an additional cost that return unused premium to beneficiaries).
  • Are looking for the most coverage for the least amount of premium.

Life insurance with a long term care rider
This solution is for people with a life insurance need, but also have long term care concerns. This policy can help provide family protection now but, if life insurance needs diminish in the future, the policy can transition more into being long term care protection. Long term care benefits are paid as an acceleration of the death benefit but, if long term care benefits are little used or never needed, any remaining death benefit will be paid to the beneficiary. Some solutions can guarantee both the premiums and long term care benefits (as long as premiums are paid as scheduled). There is a multitude of premium schedules available and both reimbursement and cash indemnity benefits are available depending on the carrier chosen. This solution provides the best leverage of death benefit but may not provide the greatest amount in long term care benefits compared to other products.

This solution may be more desirable for people who:

  • Currently have a life insurance need.
  • Want both life insurance and long term care but don’t want to buy each separately.
  • Want more choice in premium schedules—either to fit a budget or pay up premium obligations quickly.
  • Like the idea of a leveraged death benefit that pays if the policy is little or never used.

Linked benefit (also known as Hybrid) long term care coverage
These policies are for people whose primary need is long term care but want cost recovery if long term care is little or never needed. This policy has two benefit pools linked together:

  • The first benefit pool is life insurance with a long term care rider, and long term care benefits are paid from this benefit pool first. If long term care is never needed, the death benefit is guaranteed to be at least equal to or better than the total premiums paid.
  • The second benefit pool continues to pay long term care benefits but is for long term care benefits only.

These policies have options more similar to traditional long term care coverage such as choice of benefit periods and inflation options. Policy premiums and long term care benefits are guaranteed (assuming the premium is paid as scheduled). These policies can be purchased with a single premium and limited pays such as five or 10 years, and some insurance companies offer longer premium schedules such as pay to age 65 and pay to age 100.

This coverage is good for people who:

  • Primarily want long term care coverage.
  • Are looking for some customized policy options.
  • Want guaranteed premiums and benefits.
  • Want premium protection if the policy is little or not used.

Summary
Long term care planning can be an important part of a retirement strategy. There are more options than ever for finding long term care coverage that can fit into a client’s budget as well as their current and future financial approach.

The Great Long Term Care Compromise

Everyone agrees long term care is a huge problem. Too many people need it already. Many more will need it in the future. Financing for care, whether public or private, is inadequate. Long term care threatens to overwhelm both government and family budgets.

What should be done? There have been two schools of thought historically.

One says the government should pay for care after people exhaust their own resources or agree to pay back the cost of their care from their estates. This is the deal Medicaid has offered since its inception in 1965 as amended by mandatory estate recovery in 1993.

The other school of thought, ascendant recently, says the government should require citizens to prepay long term care by means of payroll deductions in a manner similar to other social insurance programs such as Social Security and Medicare.

For decades researchers, advocates and policy makers have conducted studies, published reports, and recommended programs to require the public to participate in long term care social insurance. All of these efforts have failed. Voters rebel.

Likewise, funding long term care through Medicaid with the hope that people would save, invest or insure privately against long term care risk and cost have disappointed. Medicaid costs exploded while the private LTCI market imploded.

Could there be a way to ease the path for social insurance, enhance demand for private LTCI, and relieve the burden of long term care on Medicaid simultaneously?

What if the federal government or individual states implement social insurance programs for long term care but allow citizens plenty of time to opt out permanently by purchasing private LTCI?

We have hard empirical evidence of what would happen based on actual experience recently in Washington State. When citizens of the Evergreen State were given the choice to pay a .58 percent payroll tax for long term care or buy private insurance instead, more than 400,000 sought the latter option.

Because the state gave people a choice to opt out with too little advanced notice, however, demand for private insurance overwhelmed insurance carriers’ ability to meet it in the time available.

But done right, with plenty of time for people to obtain private insurance and with a requirement to keep the coverage in effect year after year, private LTCI could finally become a major long term care funder relieving financial pressure on both the new social insurance program and Medicaid.

Win, win, win.

Social insurance covers all who do not opt out. LTCI covers the rest. Medicaid survives as the safety net it was originally intended to be, but at much lower cost and with sufficient resources to ensure access to quality care in the most appropriate venues.

The Great Long Term Care Compromise invites social insurance advocates to relinquish their demand for compulsory universal participation. It requires free market advocates to agree with mandatory participation for all who do not opt out. If both sides can make those concessions, we can quickly get everyone covered for long term care now and for the future.

Unleashing The Power Of One

Over the years I have written about the Power of One and the incredible achievements that are made possible by simply doing one more_____. You fill in the blank. It can be as simple as making one additional dial, or making one additional contact, or better yet setting one more appointment in a phone session. It can be running one additional appointment per week or making one additional sale per week or month. The beauty associated with the Power of One is that it does not matter whether you are the newest producer or the most veteran President’s Club Leading Producer. When projected out over an entire year it can really add up. In terms of long term care insurance, an extra (placed) sale per week can be worth $200,000 in additional placed premium, which, at an 80 percent placement rate, can translate to $130,000 cold hard cash in your bank account. This can translate to college tuition, new car, vacation home, or anything else that currently has the spotlight in your life.

We have all heard about how monumental the difference one degree of temperature can make in water. At 211 degrees water is hot and will scald you. However, at 212 degrees, it boils. With boiling water comes steam, and steam can power a locomotive. Harnessing this power changed our country and fueled our historical Manifest Destiny as East and West were united.

What is required to achieve the Power of One or the extra degree of 212? Focus. Attention to detail. Diligence and repetition. Desire and vision. Sometimes it requires sacrifice. When I was in college, I dated a girl with whom I shared a passion for bowling. Many of our Friday and Saturday nights were spent at the lanes. I was what we would euphemistically refer to as a “streaky” shooter. I could rattle off five or six strikes in a row and then narrowly miss just as many spares. One night I was with my family and bowled three games: 109, 234, 109. Like I said, streaky.

One day while still in college I got off of work early and, with time to kill before picking up my girlfriend, I headed to the lanes. Because I was the only one in the place, the very bored counterman elected to keep score for me. I generally loved bowling by myself because if I was in a “groove” I really wanted to throw the balls down the alley just as quick as the pinsetter could reset the pins. I was hot that day, and by the 7th frame I was flirting with perfection. A few people had straggled in and were standing at the counter as they watched the score sheet projected up on the ceiling. While I was clearly in the zone, I was also aware of the soft buzz emanating from the counter. I threw my eighth ball for a strike, and my heart started racing, and the buzz grew a little louder. After the ninth set of pins all went down I could feel the blood coursing through my ears and I actually had to take some deep breaths to batten down some of the adrenalin that was really starting to cascade through my entire body.

The first ball of the tenth frame took all the pins down and I stomped the floor and pumped my arm as the crowd at the counter started hooting and howling. It was at this point that I allowed myself to first think about the personalized bowling ball and bag that had been promised me by my girlfriend if I ever bowled a perfect 300 game. I started to mentally pick out the color of the ball.

The second ball of the tenth frame was what I call a nervous strike. I had just missed the pocket and had to wait with bated breath while the five pin wobbled several times as it decided on whether it was going to go down and preserve the streak or disappoint the crowd. It fell, and I mentally chastised myself for nearly jinxing my success by thinking about the ball and bag.

At this point, the counterman is having to remind the crowd gathered at the counter and spread out behind me to be quiet because “he is one strike away from a 300 game.” Much like you don’t talk about a “no-no” when a major league baseball pitcher is flirting with either a perfect game or no-hitter, I physically winced when I heard his words.

I stood at the line, ball cradled in my hand, and began my approach, and as soon as I let go of the ball I knew that I had failed. The dream was gone. The result: the dreaded 7-10 split. Two pins on opposing sides of the lane. The disappointment expressed by the crowd was audible and when I rolled my final ball it went cleanly down the center of the lane missing both pins.

We didn’t bowl that night or many nights thereafter, and I did not share with my girlfriend how close I came to the elusive new ball and bag until the counterman blabbed about it some months later. That was some 43 years ago, and I still remember the feeling of that errant ball leaving my grip. It is the same feeling that I experience when my beloved Chicago Cubs narrowly miss out on an opportunity to win a single game or the division title over the course of a season.

The moral to that story is that I failed to achieve a desired outcome because I allowed myself to be distracted and to lose my focus. I have often wondered if I had remained alone without a crowd or had not gotten ahead of myself in assuming success, whether I might have enjoyed bragging rights all these years to a 300 game. Don’t miss out on qualifying for that leading producer conference, or MDRT qualification, because you take your eye off the ball. Put forth the extra effort that will get you over the top by employing the Power of One and achieving the power of 212 by attaining the extra power associated with that extra one degree. As we continue to age as a society, living longer and dying slower, the need associated with long term care has reached pandemic proportions. Our clients need to hear our words and to answer the call to action that you present to them. Remember that ninety percent of our business is belief, and the other half is activity.

There have been any number of books written that compare the disciplines of golf and big business. These books emphasize the necessity for consistency, preparation, and diligent practice. This is also what makes both disciplines often a winner-take-all scenario. Just as no one remembers who loses the Super Bowl or the World Series, much can be the same to all the professional golfers who have come in second to the likes of Arnold Palmer, Jack Nicklaus, and Tiger Woods when each of them was dominant in the sport of golf.

For the financial advisor/insurance producer, success can sometimes be measured in terms as simple as either you get the deal, or you don’t; you write the case, or you don’t. But what if just a few small improvements, subtle changes, a tweak here or there, a focus on the Power of One or achieving that extra one degree to reach boiling temperature was enough to change your business and allow you to dominate your piece of the vineyard? Would you embrace these changes and be willing to perpetuate them if it meant sustainable growth and dominant success? Of course you would!

In 2011, Phil “Lefty” Mickelson was the second highest paid athlete with earnings in excess of $62M (with some $53M from endorsement contracts). In 2015, Lefty earned $51 million between PGA tour prize money as well as the numerous endorsement contracts that he has inked courtesy of a very diligent agent. His 18 hole per round stroke average was 70.5 for the 2015 campaign. That was good enough to usually keep him competitively at the top of the leaderboard in each tournament. His consistency contributed significantly to the degree of success he enjoyed despite the psoriatic arthritis with which he is afflicted.

I was curious to see how his earnings compared for the players who made up the lower tier of qualifiers on the PGA Tour. That same year, one such player was a man by the name of Roger Sloan. I had never heard of him and attributed it to the fact that I simply do not follow golf that closely. So, what kind of money did Roger earn during that same time period? About $133,000. Not too shabby for hitting a little ball around the course. He enjoyed no endorsement relationships back then and his per round stroke average was 72.5, or just about two strokes per round more than Mickelson. That is one extra swing on the front nine and one extra on the back nine. That is how competitive the tour remains to this day. Shoot, I would be thrilled to save one or two strokes each hole! For these guys however, one miscalculation or errant swing can mean the difference between victory and defeat. The two swings that Lefty kept in his bag was a differential of only 2.8 percent and yet was all the difference he needed to be a multi-millionaire.

In 2019, Sloan eclipsed the $1M in earnings, bringing his ten year career total to $1.845M. This year he has made the cut 17 of 27 times, finished in the top 25 7 times, top 10 three times, and has one second place finish. His current round score is now 71.034. That is the difference one stroke can make on the tour.

Getting back to 2015: Mickelson $51M v. Sloan $133K. By my calculations that is a differential of 383 times more money. Two fewer swings per round netted Mickelsen an extra $50M that year. Like the PGA golfer, small mistakes and miscues, a lapse of concentration, a bad decision, or failure to execute according to plan can be worth millions to you and your business.

So, what would a consistent 2.8 percent improvement on your placement rate, closing rate, lead conversion, referrals, submitted premium, placed premium mean to your business? Over the years I have seen producers just “miss the cut” in terms of qualifying for some incredible company-sponsored leading producer trips falling just short of either placed premium or an anemic placement rate. To this end, I remember an instance while I was employed as a Divisional Vice President, that I had been placed on alert by the Chief Sales Officer to be prepared to inform the number one producer in the company that she might not be eligible to attend the leading producers conference because of her 59 percent placement rate. The cut off was 60 percent, set in stone, and not influenced by the $600,000 of placed premium ($200,000 was the qualifying threshold) that she had achieved. Fortunately, a surge in the final two weeks of the year got her to 60.2 percent and I never had to have that ugly conversation. But imagine her reaction—anger, frustration, disappointment—that would have been directed at me when it was her failure to achieve the requisite standards. That was one ugly bullet I was very grateful to dodge.

Whether it is a diminished total of placed premium or a lack-luster placement rate, the absence of that extra one degree or effort to achieve the Power of One can be the difference between failure and success. Make the commitment to yourself, your clients, and your business that you will strive for the green jacket and put forth the extra effort that will make you a winner.

I Survived The Washington Fire Sale

(Reprinted from the CLTC Digest in cooperation with
Certification for Long-Term Care, LLC, www.ltc-cltc.com.
Email Amber Pate at apate@ltc-cltc.com for a more than 20 percent
discount on CLTC training for Broker World subscribers—just
mention code BWMAG.)

What follows is my first-hand account of the 2021 Washington Cares Fund initial rollout and my reflections on the impact of the law. At BuddyIns, we built our community to help insurance agencies, referral partners, and long term care insurance specialists educate Americans about long term care planning and best-value insurance solutions. As our community has embraced new technologies, this naturally puts us in a position to help during the turbulent Washington market during the summer of 2021.

We made the decision early in the process to maintain our overall mission despite the fast-paced environment in Washington. We focused on education and the value of the insurance coverage itself, even if clients were also pursuing an opt out to the state’s payroll tax.

This article was originally written as of late September 2021 as our teams continued to work closely with clients to navigate the state rules and carrier changes that are still in development. Even as of early December 2021, there is still legislative talk of delaying implementation.

I hope this story can benefit consumers and insurance specialists across the country who may face similar decisions from actions that their states may take to address long term care expenses.

March 2019—A New Long Term Care Payroll Tax Passes in Washington
The Washington Trust Act first passed in 2019. This law seemed different from the Federal Class Act program a decade earlier that was a part of the Affordable Care Act. The Class Act did not succeed once it was deemed not to be actuarially sustainable. The Trust Act was different in the fact that it required mandatory participation for every W-2 employee and that it would be funded through a payroll tax. It won’t be until 2022 that the payroll tax is planned to be implemented while allowing an opt out exemption through the purchase of private long term care insurance.

In 2019, the insurance companies took a wait and see approach as the state had not engaged as much with the private insurance community as the law was being developed.

February/March 2021—Awareness of the Law Expands
Something changed in early 2021. The Washington legislature worked feverishly to amend the law that was about to be implemented. The biggest issues in the legislative negotiations seemed to revolve around the private insurance opt out and deadlines. What types of insurance products qualified for the payroll tax exemption? When must an employee purchase a policy to opt out? Growing concern in the December 2020 actuarial report suggested that if too many taxpayers opted out, the trust would be underfunded to pay out future benefits. The amended law vacillated between different deadlines for the private insurance opt out until a final negotiated date was set to require purchase prior to November 1, 2021.

Suddenly, there was much less time to plan for private insurance as an alternative to the payroll tax. This got the attention of many employers. The insurance companies and agents began to notice a rapid increase in demand.

At BuddyIns, we co-hosted an educational webinar for the Washington clients of a large employer benefits firm. To our amazement, over 700 registered, including the CEOs, CFOs, and HR directors of many employers in the Pacific Northwest.

April 2021—Employers and Carriers React
In a matter of weeks we received requests from over 200 Washington employers to begin immediate LTCI enrollments. We realized we were going to need a bigger boat.

We surveyed nearly 30 long term care insurance companies that spanned the spectrum of standalone, hybrid, and worksite products to gauge their interest in offering products in Washington. The worksite and standalone carriers experienced the heaviest inquiries. There was an even greater rush since the largest standalone worksite company had already announced their exit from the entire LTCI market. The other worksite and standalone LTCI carriers began to ration the availability of their products in Washington. Adding more uncertainty, it was not entirely clear whether the life/long term care hybrid worksite products would qualify for the exemption because the Washington state definition of long term care insurance was fairly broad.

Reactions of the carriers with individual standalone and hybrid LTCI products ran the gamut from extreme caution about offering their products to aggressively promoting their products even in the face of uncertainty on the state rules.

At BuddyIns, we prepared for both worksite and customized individual solutions. We launched a new website to handle the volume, developed a system to manage enrollment emails, and automated reporting to track employer and employee relationships. We prepared ongoing live educational webinars throughout the summer to educate thousands of employees. We also quickly began building a large team of experienced account managers and LTCI specialists for one-on-one long term care planning consultations.

May 2021—Warning Signs Ahead
In late April, the amended law passed as expected, but notably without a formal definition of the products that qualified for exemption aside from the general Washington definition. One Friday in mid-May, an update appeared on the state’s website to include new language defining qualifying long term care insurance in a stricter fashion. This could potentially disqualify many products including options for employer enrollments beginning the following week.

Just as concerning, we started to notice a consistent theme in our conversations with employers and employees. The questions include: How long do our employees need to keep the policies? When can we terminate the payroll deduction? The state is not going to check next year that everyone still has the policy, are they?

Unfortunately, there did not seem to be a mechanism anticipated in the law that would recertify coverage. Nor was it clear that the state had been provided resources for ongoing review of the payroll tax exemptions after the initial opt out period.

At this point, BuddyIns faced a crossroads. Our mission is to do what is best for our clients and to fairly recommend the coverage as it is intended to be offered by the insurance companies. Despite the pressure to move forward with the planned worksite enrollments, we decided that it would not be in the clients’ or carriers’ best interest for the majority of the enrollments.

We still had the capacity and expertise to provide individual solutions offered one-on-one by LTCI specialists. If the vast majority of our enrollments would be individual consultations, we were going to need an even larger specialist team.

June 2021—Growing to Meet Demand
Our platform gave us the flexibility to quickly bring in highly qualified and vetted LTCI specialists. However, we never expected to have to do it this quickly and at this scale.

We began onboarding an additional five to 10 LTCI specialists each week over the next two months. Soon, we had grown the team to nearly 70 specialists. Our new specialist team had to quickly learn the rules in Washington, our technology platform, how to have quicker planning meetings, and to navigate all of the insurance company changes.

Long term care planning is a consultative process that typically takes months. This was the most difficult transition the team had to embrace. How do we abbreviate the process to meet the state deadlines? We developed an approach to offer at least minimum, meaningful coverage for clients who intended to keep the policy for long term care planning purposes. Additional coverage as a supplement could be offered once the clients had more time to plan beyond the November 1, 2021, deadline.

July 2021–Carrier Changes Ahead
Once we substituted most of the worksite enrollments for individual custom consultations, we were off and running. As you might expect, the most challenging conversation was with a typically younger employer just looking to opt out and with no particular interest to learn about the coverage or long term care planning. While we firmly believed it was in everyone’s best interest to offer the products the way they were designed, there was still significant pushback from employers, employees, and consultants. Their frustration was not directed towards us, but rather at Washington state for having mandated such a short time period to make this important planning decision.

Of course, many LTCI agencies and agents in the market were taking different approaches. Some agents were getting licensed for LTCI in Washington for the very first time and many were succumbing to the temptation to figure out how to sell the lowest priced product possible to “beat the tax.”

As a result, one of the largest standalone carriers in the market announced they were exiting in Washington in late June. This put pressure and greater demand on the other carriers. Soon carriers began imposing minimum coverage requirements. Behind the scenes, carriers began to contemplate their exit from Washington as it was clear they could not satisfy the demand in such a short time frame.

August 2021 – Supply Leaves the Market
Early August represented a collapse in the supply of individual LTCI and hybrid products in Washington. As the carriers announced major product changes weekly, it only served to stimulate more demand. The carriers had no choice but to shut down as they simply could not keep up with the demand. One of the largest carriers in the market shared with us that at the peak, they were receiving about 1,000 individual applications per hour, which might normally be the number of applications they received in a month across the entire country. They simply did not have the systems or employees to satisfy the demand.

Our BuddyIns team did its best to pivot to the remaining solutions, but so did the rest of the market. We were fortunate to have access to a broad portfolio of product and specialists with expertise in a variety of different options. Nonetheless, by the end of August, the only products that remained had limited distribution and therefore more supply constraints. BuddyIns continued to offer clients excellent options for those interested in meaningful long term care benefits, but for younger clients looking for individual solutions, there simply were not many options available.

The worksite options continued to be offered in the market despite the challenges of not knowing for sure whether the products would qualify for opt out and if clients would keep the coverage.

Time was running out anyway for clients to submit their applications.

September 2021—Reflections on the Washington Fire Sale
I’m proud of what our team accomplished in a short period of time and in a challenging environment. While we couldn’t offer an insurance solution to everyone who sought our help, we helped many individuals learn about long term care planning and developed many relationships. These relationships will continue to be important as we help clients and referral partners navigate the long term care insurance market for years to come.

Washington became the first state in the country to move toward a path of providing a minimum level of long term care coverage funded by their workers. This is the litmus test in a social experiment whose implications we do not yet fully understand.

There are elements of the Washington program that were well designed, like requiring the program to be actuarially sound, which meant mandatory participation. The state was tasked with creating a long term care planning education and awareness campaign that has the potential to help families in a variety of ways. The state also emphasized providing more home health care benefits, which will take some of the burden off of the WA Medicaid program which had begun to absorb much of these costs.

However, there may have been missteps that can serve as a learning experience for other states. For instance, Washington may have been better served by engaging with the private insurance companies early on to coordinate benefits, ensure supply, and give people a realistic way to purchase their own private plan. The state and private markets ended up competing against one another with mixed messages that created an environment of distrust and uncertainty with the consumer instead of embracing the other side. Consumers that were the right candidates for private long term care insurance did not have enough time to plan and lost many private insurance options while deciding what to do. Others still don’t know there is a payroll tax yet. Ironically, both the public and private markets need each other to solve the long term care financing issue.

With the wave of baby boomers entering extended care years, and with the effects of COVID placing additional strain on long term care costs, we are beginning to hear about a wave of new states exploring a payroll tax to fund a minimum amount of long term care. They can use the Washington experience as a guide to create better outcomes and coordination. Washington state is continuing to explore positive changes. Now that the ability to purchase private insurance for opt out may be over, Washington is embracing the private market to supplement the far greater risk that faces their millions of residents beyond the $36,500 with nominal increases that the payroll tax is intended to provide.

At BuddyIns, we will continue to monitor the activities in Washington and other states considering similar legislation. We intend to continue to be a trusted resource for long term care planning.

The Art Of Achieving Balance

While we all know there is no such thing as a unicorn, that does not stop us from writing stories, creating cartoons, and other fairy tales about them. Nor is there concrete evidence that the Loch Ness Monster exists, and yet that tale persists. I have a friend who believes that he has seen Sasquatch. I would also add the concept of Time Management to this list of things that do not exist, yet people continue to dwell on it.

I firmly believe that time management is an illusion that a great many people pursue but, like a cloud in the sky, can be seen but never touched. I state this as an affirmation because I know that time simply cannot be managed. We can prioritize and micro-schedule, but we all receive the same 24 hours each day, the same 168 hours each week. Sixty seconds to each minute, sixty minutes to each hour. It is a law, and like all laws of nature and man, needs to be respected. Success follows when we are obedient to laws over which we have no control.

I recently had a conversation with a producer who spent twenty five minutes lamenting at how poor he is at time management. After listening to him ramble (his choice of words) for those twenty five minutes, he ceased and it was my turn. I immediately pointed out to him that he had referenced “time management” some seven times in those twenty five minutes, and that he should not be so self-deprecating because of an inability to manage something as illusory as time. I shared with him that we have as much chance of managing time as we do of touching a cloud. Just last week I sat on the modern miracle of jet planes, looked out the window at approaching cloud banks, and realized that as we were flying into them and through them there is never any tangible contact. Yes, there is condensation on the outer surface of the plane, but for the passengers it is largely an illusion.

At the conclusion of my agent session, I made the suggestion to him that rather than attempting to manage something that is simply unmanageable, he would be better served if he focused his efforts to achieve happiness and success by attaining balance in his life and being proactive rather than unbalanced and reactive.

A series of conversations with this same producer as well as several others led me to share that achieving balance in one’s life is really a series of choices that we must make every day, to wit:

  • It is about organization, not about making excuses.
  • It is about exercising discipline and being diligent.
  • It is about avoiding a state of inertia and rising above it.
  • It is about prioritizing our activities, not managing the time.
  • It is about never uttering “I’m sorry” when it comes to owning your business.

A long term care advocate can be successful by working an honest 40 hours per week. Yes, you heard it right. Not 60 or 80 hours, but only 40. An honest—yes, there is that word again—40 hours will make an advocate successful at the Leading Producer level if he or she employs the above tools.

  • It is about working smarter, not harder.
  • It is about creating and maintaining balance in the various spheres that comprise our lives—family, professional, personal, spiritual, physical, recreational.
  • It is about maximizing—not managing—the 168 hours that we are granted each week.
  • It is about focus.

Some life lessons gleaned over the years
More than a few years ago I learned, “Focus on everything is focus on nothing.” You simply cannot spread yourself so thin and expect to remain focused enough to accomplish anything at a level equating to success. That is a formula for mediocrity.

Second, what is your time worth? Only you can assess this and assign a value. It is important to remember and to discipline yourself so as not to chase meaningless opportunities.

Third, it is about answering the question: “Am I investing my time, or merely spending it?” Time invested in an activity such as reading to your grandchildren or family history and genealogy would surely trump the time spent playing Fortnight or spending hours on Facebook or Pinterest. Sorry, I am neither a gamer nor a social media junkie.

Simple math:

  • 40 hours of work (five eight-hour days or four 10-hour days—it does not matter) broken down as follows:
    • Four hours education (workshops, webinars, conference calls, self-study)
    • Five hours marketing
    • Eight hours scheduling appointments
    • 20 hours of appointments
    • Three hours of administration
  • 49 hours of sleep (achieving the optimal seven hours per night)
  • Six hours of physical exercise (six one-hour sessions Monday-Saturday)
  • Seven hours of personal spiritual time (one hour daily–scriptures, prayers)
  • Three hours of church worship
  • Seven hours of service (extended family, neighbors, friends)
  • 14 hours of recreation (two hours daily)
  • Eight hours date night with significant other (Friday and Saturday)
  • 21 hours of family time (for those who do not have immediate family, this could be phone, Skype, FaceTime, letter writing, etc.)
  • Four hours of maintenance and housekeeping

Leaves a reserve reservoir of nine hours, and we were generous with some of the above allocations.

These categories can be combined; a family activity that involves hiking or skiing would encompass family time, recreation, physical exercise, etc.

You work for yourself, which means that you are primarily accountable to yourself. To this end, the first question that you must ask, and answer, is, “Would you have hired you in the first place?” Follow up questions should then include, “Are you measuring up?” “Would you not fire you based on your current performance if it was coming from someone else?”

Remember that when performance is measured it improves. When it is measured consistently, it improves exponentially. So, stop managing something that is not manageable and focus on the greatest resource you have in your possession: You.

“All good performance starts with clear goals.” —Ken Blanchard.

Long Term Care Irony

“If you don’t buy long term care insurance, you could lose your life’s savings.”

We’ve heard that threat from government, private companies and the media for decades, but private long term care insurance has languished nevertheless. It wasn’t until a state government forced people to buy public long term care coverage through the WA Cares Fund that private policy sales exploded. Demand for private long term care insurance, as the only means to escape Washington State’s otherwise mandatory payroll tax, overwhelmed supply leaving many citizens of the Evergreen State trapped in a public program they would rather avoid. How ironic and contra-intuitive.

Let’s first put this puzzle into historical context and then resolve the incongruity by examining the almost universally held, but faulty premises on which it’s based.

Anyone who knows anything about long term care financing in the United States recognizes this mantra: Own long term care insurance or you may be impoverished by catastrophic care costs. Almost three of four Americans will need some long term care; one in four will face huge bills. All across the country people spend down into impoverishment until they slip onto Medicaid. That safety net only becomes available when people have been wiped out financially with no more than $2,000 left in savings and no more than $723 per month of income. Both the academic and popular media drum those warnings loudly and constantly into our ears.

Wow! How awful. You’d expect people to seek out and buy private insurance against such a risk without having to be cajoled by commissioned sales agents. But they don’t. How odd.

Finding that long term care’s high cost and Medicaid’s draconian financial eligibility rules weren’t enough to win consumers over, the state and federal governments hammered home the message with carrots and sticks. The long term care partnership program promised partial estate recovery forgiveness in exchange for buying private long term care insurance. Didn’t work. The “Own Your Future” long term care awareness campaign urged people to wake up and take action. They didn’t. Tax deductions and credits at the state and federal levels made private coverage cheaper. But even that didn’t work.

As positive incentives failed, the government tried negative persuasion. Policy makers figured making Medicaid even harder to get should sensitize consumers to the need for private insurance. The look-back penalty for asset transfers to qualify for Medicaid was lengthened and strengthened by federal legislation in 1982, 1988, 1993, and 2006. Congress and President Clinton made it a crime to transfer assets in order to qualify for Medicaid in 1996 only to repeal that “Throw Granny in Jail” a year later and replace it with the unenforceable “Throw Granny’s Lawyer in Jail” law in 1997. Medicaid estate recovery became mandatory in 1993. The home equity exemption was capped in 2006. None of these measures persuaded consumers that they should take personal responsibility to plan, save, invest or insure for long term care.

In fact, nothing worked to get the public to buy private long term care insurance until the State of Washington imposed a compulsory public program financed with a .58 percent supplemental payroll tax and promising a $36,500 lifetime benefit for state citizens. Although the state represented this program as a major contribution to solving the long term care financing problem and promised it would ease the public’s worries about long term care, as soon as a choice to “opt out” by purchasing private long term care insurance became available, Washingtonians stampeded to the exits. Private LTCI carriers were overwhelmed by the demand. Within weeks, private coverage became almost entirely unavailable in the state.

No amount of importuning, positive incentives, or negative threats prevailed. But let the government step in to force people to pay for public long term care benefits and all of a sudden private insurance enjoyed a fire sale. Is this just a one-off in Washington State or could it become a pattern as other states and the federal government experiment with compulsory public long term care programs? Should people and companies hurry to get in front of those experimental public programs by insuring privately? Will they? Or will the long term care irony prevail with denial and evasion continuing to hold sway?

It all depends on whether or not future state and federal long term care programs offer people a choice, an opportunity to opt out by purchasing private coverage. If they do, consumers will behave as they have done in Washington. If not, not. Why is that true?

The answer lies in the commonplace but faulty premises about Medicaid and long term care financing listed in the preceding paragraphs. Medicaid long term care eligibility does not require impoverishment. People can have incomes up to the cost of a nursing home plus virtually unlimited exempt assets and still qualify. Estate recovery is easy to evade. There is no evidence of widespread long term care spend down which is why the academic literature cites none. For documentation of these facts about how long term care financing really works, see Medicaid and Long-Term Care.


So here’s the answer to the “Long Term Care Irony.” People don’t buy private long term care insurance when the government pays for most catastrophic long term care costs, as it has done through Medicaid since 1965. No amount of cajoling, positive or negative incentives will get them to buy. But create a real cost for long term care by forcing them into a payroll-funded government long term care program and they’ll rush to buy private coverage if that escape hatch is available.

The lesson for state and federal central planners is this: If you must force people into mandatory payroll-funded long term care programs of dubious solvency, at least give them a way out by purchasing private insurance so we have some consumers able to pay their own way if and when the bottom falls out of the country’s many fiscally challenged entitlement programs.

X Doesn’t Always Mark The Spot

An increasingly common occurrence in an emergency room or even in a routine doctor office visit is the diagnosis of chest pain in a woman. An affected female describes quite typical symptoms of angina and significant chest pain, shortness of breath, or central abdominal pain that warrants further investigation. The physician sees a normal or nonspecifically abnormal EKG. The patient may or may not be sent home with reassurance. When it reoccurs, a treadmill is ordered and often positive. A cardiac catheterization is next. No obstructive lesions are seen.

Once, these women would have been lost to follow-up and their next encounter might have been with a heart attack or even sudden death. It is recognized that this condition is now recognized as INOCA (Ischemia and No Obstructive Coronary Artery disease). This is also known as Syndrome X. Here “X” doesn’t mark the spot—in fact the coronary angiogram much more often than not comes up clean. It is estimated that 3-4 million women in the United States have stable INOCA. Knowing what the diagnosis is not only allows treatment of a significant portion of women at risk, but also contributes to a decreased amount of unneeded testing that comes with its own set of complications and adverse effects.

The two most common causes of Syndrome X are coronary microvascular dysfunction and vasospasm of the epicardial arteries. The coronary catheterization shows relatively clean coronary arteries, and the condition may be treated more as an inconvenience than a medical condition of concern. More recent studies of patients with INOCA/Syndrome X however show an elevated risk of cardiac events. These include acute angina and coronary syndrome, stroke, hospitalization, and sudden death. A high percentage show no demonstrable cardiac lesions responsible.

When very small coronary vessels are deprived of blood flow, the occurrence of angina (a heart’s cry for help as it is being inadequately perfused with oxygen) is just as telling as a larger more demonstrable heart attack. Vasospasm (when the arteries go into spasm and do not permit adequate blood flow) show similar signs and symptoms. Either way, whether smaller vessels are affected or even “kinked,” the results are the same. At this point modification of all risk factors becomes necessary to minimize symptoms and to prevent progression into more severe forms of obstructive disease.

There is now more specific testing for coronary microvascular disease and vasospastic coronary symptoms. Called CFT (coronary function testing), it involves the use of vasoactive infusions with chemicals such as adenosine and acetylcholine. Nitroglycerin is also used to diagnose nonepithelial dependent microvascular dysfunction. If the diagnosis is unclear, PET scanning, cardiac magnetic resonance and Doppler echocardiography is also employed. At times, empiric therapy is also used—this is a doctor’s high clinical suspicion of this condition followed by what would be the treatment if that were the case. Those with contraindication or allergies, which prevent full testing, may make the diagnosis if successful response to treatment is observed with therapy.

Underwriters look for as much information as they can get from testing, since the diagnosis and treatment are not always clear-cut. All cardiac testing, successful modifications of risk factors, nature of treatment, and frequency of symptoms are considered. When the diagnosis is clear and the time between events is greater than six months to a year, standard insurance is possible. When poor cardiac follow-up or risk factor modification is not optimal, a policy may be rated to account for this. With Syndrome X, knowing that the disease has been diagnosed even when a catheterization is negative and that “X” doesn’t always mark the spot is more than half the battle.

Is “Generational Theory” Useful In Financial Services Marketing?

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If you’re a financial advisor or agent, be aware of allowing your marketing to be influenced by increasingly discredited generational stereotypes.

While they introduced the term “millennial” to the world, William Strauss and Neil Howe were not the first researchers to promote the concept that generations can help explain changing societal attitudes. Social scientists have long tracked generations, writing about phenomena such as the post-World War II economic boom that seemed to coincide with a surge of new humans, the “Baby Boom.” It’s fashionable these days to explain everything from finances, political leanings, and family values as resulting from being born in a particular year.

It wasn’t until Strauss and Howe’s bestselling book, Generations, that the idea that you could overlook the complexities of human life, ignore diversity, and reduce entire swaths of a population to one variable (birth year) became part of American culture.

Generational theory has morphed into a trendier, turbocharged version of the old Sunday newspaper horoscope wrapped up in data points and questionable research. “You are a Millennial. You are lazy, entitled, and easily triggered.”

Generational theory churns out stereotypes faster than scientists can challenge them. It has permeated American culture, becoming incredibly influential in multiple disciplines, including education, sales, advertising, and marketing. It’s not unusual to see Strauss and Howe quoted and misquoted in popular publications, television reports, podcasts, and even cited as the impetus behind political decisions. The true seduction of generational stereotyping is that it promises the ability to predict outcomes without much effort. You have easy answers for human behavior and nearly everything happening in the world based on birth year. This is very similar to the manner in which pop astrology broadly characterizes Sagittarius as loyal and compassionate while Geminis are flexible and social.

Articles claiming to show financial professionals how to market to Millennials and Gen-Xers have popped up in trade journals, online, and in training seminars. But is the stereotyping of a group of well over 140 million Americans identified as Gen-X or Millennial the best way for advisors to build good marketing platforms? Is designing content that assumes people born during specific years are all “nomadic digital natives” or are more self-absorbed or socially aware than other groups the right way to attract these demographics to your practice?

I believe that focusing financial marketing on traits implied to be set in stone could wind up alienating more potential clients and referrals than it will ever attract. It’s an overly simplistic way to think about your prospects and clients, their highly personal, complex relationships with money, or their attitudes toward retirement planning. Building content around generational personalities can skew marketing toward the vague, glossing over the diverse environments and upbringing that shape a person’s attitudes and habits.

Worst of all, assuming things about people born in certain generations may come across as insulting and demeaning to the very people you want to bring into your practice. Most people, after all, dislike being forced into categories and labeled. Producing collateral entitled “A Millennial’s Guide to Buying a Home,” or “Retirement for Gen-Xers,” implies that you consider these groups incapable of understanding conventional economics or believe they are inflexible or in need of “special” counseling when it comes to money.

Building marketing campaigns around generational theory may create backlash as people feel they are not being taken seriously as individuals. Your practice could be seen as out of touch with social distinctions, unique goals, attitudes, and backgrounds. For instance, some of the supposed personality traits of millennial students outlined by Strauss and Howe are often unrecognizable to poorer students and people of color and could be viewed as bigoted.

Meanwhile, a growing number of contemporary sociologists believe that generational thinking is invalid pseudoscience and are counseling against its use in financial services marketing. That doesn’t mean, though, that generational theory won’t continue to influence many areas of our lives and contribute to intergenerational misunderstandings and friction.

Financial and insurance professionals, then, are probably better off avoiding generational stereotypes altogether. Instead, you should strive to create unique, flexible, customizable content that resonates with a variety of individuals regardless of their demographic. In what is arguably an overly digitized, impersonal world, bringing greater customization and personalized service into your practice may be what’s needed to keep your business relevant, healthy and prosperous for generations to come. It may be time to stop making assumptions about the next generation of retirees and instead help them discover ways to prosper in a more uncertain and challenging economic reality.

Changing The Customer Experience With Benefits Technology

Over the last several years we have seen employers increasingly turning to technology for their benefits administration as an efficient and compliant solution to manage the ever-changing world of employee benefits. According to a pre-COVID study,1 a majority of employers had increased their spending on benefits-related technology in the past five years. More than 50 percent expected further increases in the next three years to address their top benefits challenges, including controlling costs, increasing efficiency, ensuring legal compliance, and improving workforce engagement.

However, the COVID-19 pandemic was an inflection point for employers. It led to workplace changes that included remote work, flexible schedules, employee well-being and technology. While advancements in technology were already in motion, the pandemic accelerated this trend prompting the insurance industry to move at a faster pace to help meet their customers’ digital needs in a virtual workplace.

This was particularly notable during Open Enrollment season last year which prompted more organizations to adopt benefits administration and enrollment technology. Research conducted this year2 revealed that more than a third of employers say the pandemic accelerated their organization’s use of benefits technology. In addition, the pandemic spurred more organizations to integrate their existing HR technology systems. Thirty-seven percent of organizations say their HR technology systems are now fully integrated and 52 percent report partial integration, up from 32 percent and 49 percent, respectively. With benefits technology becoming more accessible, we expect this trend to continue as companies move toward different workplace models that include remote and hybrid.

Enhancing the User-Experience with API and AI
Benefits technology is among the fastest growing categories of human capital management (HCM) venture capital. The availability of HCM-related technology is expanding rapidly with investors steering more than $4 billion into software and platforms in 2018 alone. API (Application Programming Interface) and AI machine-learning technology is driving the innovation. For example, the use of API technology by insurance carriers and third-party vendors is growing. These days it’s not surprising to see more platforms and carriers partnering to establish API integrations for a wide range of processes including benefits plan set-up, enrollment and eligibility transactions and updating, and evidence of insurability processing. Research found API connectivity has great appeal among large organizations, as well as fast growing start-ups, retail companies and employers already highly digitized in their benefits administration. Among employers that are confident in the potential of real-time connectivity, six in ten are more likely to recommend switching non-medical carriers to have access to API integrations, if all else were equal (vs. 34 percent on average).

Meanwhile, AI machine-learning technology is taking the user experience to a whole other level. Take for example Nayya, which leverages AI and data science to simplify the benefits enrollment experience by arming employees with a decision-making tool that gives them the confidence to select the right benefits. We all know that, for many employees, open enrollment can be daunting, and it’s not uncommon for employees to auto-enroll without evaluating their benefit options. With an AI enrollment platform like Nayya, employees answer questions regarding their existing medical plan, household, geography, and lifestyle, such as how active they are or are their kids in sports. Within minutes the platform—which is available in English and Spanish—provides employees with a recommended benefits plan for them to consider. Other benefits solutions, such as Flock, allow employers to experience improved data connections, including utilization of real-time API data exchange, plus seamless integration with Nayya for best-in-class decision support during enrollment. This is a win-win for any employer seeking cost-savings solutions and increased efficiencies, especially when research showed that managing nonmedical benefits plans can consume an employer’s staff more than one week per month.

Improving the Employee and Employer Experience
The advantages of upgrading to new benefits technology are too good to pass up. For employees, this creates a user-friendly benefits experience. Seventy-two percent of employees who reported satisfaction with their benefits experience say they enrolled via a digital method. In addition to boosting employee satisfaction, benefits digitalization is also tied to better benefits understanding and satisfaction among employees.

From an administrative standpoint the technology also helps an employer manage benefits administration more efficiently. This is important given the changing workplace and the need for HR staff to focus on workplace initiatives, such as office safety or employee wellbeing, in addition to managing employee benefits. To give you an example, research found that larger firms (1,000 or more employees) spend the equivalent of nearly a full work week, or an average of 32 hours, updating renewal information on their platform due to their size and complexity. The ongoing management of non-medical benefits plans (e.g., dental, disability, life, accident, critical illness, etc.) is also time-intensive, with employers spending an average of 30 hours per month.

This is time consuming, but with API integrations the platforms will ease the administrative burden and dramatically improve the benefits administration experience for employers and their teams. However, a lot of employers need help. A majority of employers want and expect a benefits broker to help guide their decisions about technology solutions. Organizations most likely to rely on a broker to help source and manage their most recent technology platform installation are typically small to midsize firms that are still mostly dependent upon paper processes and feel managing benefits is increasingly complex.

So, what should brokers be thinking about to best prepare their clients who are making the transition to an online benefits administration platform or enhancing their current one? As you explore options for a platform that is suitable for a client, it’s important that you keep in mind the following:

  1. Establish Client’s Objectives: First, clearly identify your client’s primary motivation for reassessing its benefits technology strategy and evaluating potential solutions. Is it moving away from paper (e.g., first time using a benefits technology platform) or is it a result of being dissatisfied with current benefits technology platform capabilities, service, or cost structure? It’s important to scan the market for new technology and ensure the current platform is still the best fit for your client.
  2. Ask the Right Questions: Once you are clear on the client’s objectives, make sure you ask the following questions: Are you looking for an open enrollment solution only or a year-round platform? Does your current payroll provider offer benefits enrollment solutions? If not, do the platforms you are considering integrate with your current payroll provider? Are your group eligibility rules simple or complex? (Benefits administration platforms offer varying levels of flexibility to support different group benefits eligibility requirements; therefore, it’s important to understand if the vendors you are considering can support a client’s eligibility requirements.) Are you looking for a low- or no-cost solution? Asking the right questions and involving your client in the process is critical to not only help with decision-making but to ensure you are coming back with the right solutions.
  3. Assess Level of Platform Management/Support: Evaluate to what extent your client’s team will need to be involved with the initial setup and ongoing management of the platform. Benefits technology platforms offer either a software-as-a-service (SaaS) model or full-service support. Employers say that managing benefits is becoming increasingly complicated, with 59 percent in 2019 claiming that they are challenged by complexity, up from 47 percent in 2012. As a result, it’s important to understand the level of service the provider offers.
  4. Understand Services Your Client May Need: Every organization is different and there is no one-size-fits-all. It’s important to evaluate what services your client needs to help provide efficiencies and improve the user-experience. If you are helping a client navigate this, ask the following: Do you need more than one Human Capital Management module, e.g., in addition to benefits enrollment, is your organization also looking to integrate payroll, talent acquisition, and/or performance management? Benefits administration vendors are generally either stand-alone platforms or part of a broader HCM platform. Are they looking for ACA reporting, spending accounts, and/or COBRA administration, call center support, etc.?
  5. Understand the Cost Structure: Technology is an investment that will ultimately help an employer not only create efficiencies but create a user-experience that will benefit employees. However, there is a lot that goes into understanding the cost structure for a new platform. Here are questions you should be asking: What is the PEPM fee? Are there monthly minimums? What services are included for this fee? Are there fees to build out or update EDI feeds? Are there fees charged at renewals? What wraparound services are available and at what cost?
  6. Ask for a Demo: Request a demo of the software to fully understand the platform’s strengths and weaknesses to ensure it will meet your client’s needs. And once you land on the right solution to recommend, it’s important your client also sees a demo so that the process is collaborative.

There is no doubt that the digital revolution is sweeping across the insurance industry, and with the pandemic, timelines have been expedited to best meet employers’ needs. While it can be overwhelming, the role of the broker is more important than ever. Familiarizing yourself with workplace benefit technology trends and becoming a subject matter expert will tremendously help your clients, who are most likely evaluating all of their technology needs from benefits administration to collaborative workplace tools. And lastly, partnering with the right carrier who can help you navigate the process from end-to-end and offers various benefits technology solutions can make a difference. As we are seeing in the industry, technology is changing every aspect of how we deliver insurance, and it’s up to us to help our customers have a first-in-class digital experience.

Unless otherwise noted, the research/data in this byline are from Guardian’s 9th Annual Workplace Benefits Study Digital Overdrive and Guardian’s 10th Annual Workplace Benefits Study Inflection Point. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Nayya and Flock are neither subsidiaries nor affiliates of The Guardian Life Insurance Company of America.

References:

  1. https://www.guardianlife.com/benefits-administration/report.
  2. https://www.guardianlife.com/reports/inflection-point.

The Road Less Traveled—Improving The Path Of The Eldercare Journey

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As financial advisors it’s easy to become focused strictly on the needs of our clients. Crunching the numbers and charting a path through the financial wilds is what we do best. However, when it comes to long term care planning, we routinely make the case to clients that their need to plan is not to protect them as much as to protect their families. Yet, there is frequently a disconnect between the map and the territory when it comes to long term care planning and the realities of providing care.

With 89 percent of caregivers providing care to a relative, we can see that it’s important to engage a client’s family directly when we discuss long term care.1 Likewise, when we consider that 52 percent of caretakers providing care to a loved one feel unqualified to provide it, it’s easy to understand why we’re seeing a push for more comprehensive solutions.2

This new, holistic approach can be thought of as the Eldercare Journey. It is a journey with phases that requires a team to help manage. It centers around providing care to a loved one, while maintaining the caregiver’s health and finances as much as possible.

Prelude to the Journey
First, it’s helpful to understand what one experiences in the lead-up to the Eldercare Journey. To do this we can think of aging as a journey of its own, with distinct stages—Go-Go, Slow-Go, and No-Go:3

  • The Go-Go stage represents the beginning of later life, when folks are still in relatively good health and able to dedicate their attention to their passions.
  • In the Slow-Go stage, people experience the first signs of declining health. Mobility generally begins to diminish and their need for help from family begins to grow.
  • Finally, the No-Go stage is characterized by the individual’s need for regular care and assistance.

Steps of the Eldercare Journey
Understanding these preliminary conditions can help us define some common steps on the Eldercare Journey:

  1. Awareness. During this step, family members first become aware that their loved one is losing some capacity for self-care. This can be as simple as a son noticing his father forgetting to turn off the stove. This stage might correlate to the “Slow-Go” phase detailed above.
  2. Early Action. In this phase the family begins to help in small ways. Perhaps they’re taking their mother shopping or driving her to appointments that she can no longer manage herself. This phase could occur in, or between, the “Slow-Go” and “No-Go” stages.
  3. Crisis. Here, a loved one suffers a health event that makes them unable to care for themselves independently, and their family must determine how best to care for them. This comes firmly in the “No-Go” stage.
  4. Claims. This final step is when consistent care is required, and the appropriate parties are providing benefits.

How Should We Pack for the Journey?
Going forward, financial advisors need to know how to best set clients up not only with a plan, but with tools they can use when the time comes to put those plans into action.
Thrivent conducted an internal survey in August 2021 among existing and prospective policy holders to examine this very idea. The major takeaway from that survey was that what families are primarily looking for is guidance, as well as services that they can call upon for assistance when the road gets bumpy.

The types of guidance and services families need, however, depends greatly on what stage they’re in on their journey. With that in mind, let’s revisit the steps of the Eldercare Journey and examine the type of support that might benefit clients experiencing each phase:

  1. The Awareness step is full of clients still in the “Go-Go” phase, or those beginning the “Slow-Go” phase, who probably aren’t putting a lot of thought into long term care. For advisors, it’s important to maintain contact with clients throughout this step while getting to know their families.

    Research has shown 70 percent of women change their financial advisor within one year of the death of their spouse.4 This suggests that in many cases, no substantive relationship has been established between advisors and the family members closest to their clients. Additionally, a recent estimate cited that only 40 percent of individuals who purchased long term care insurance fully understood their benefits.5 As such, small gestures like regular emails meant to touch base and remind families about their plan can be incredibly valuable.

    Carriers are also beginning to offer wellness programs that have the potential to keep clients healthier longer and ultimately reduce the number and duration of claims. While there was some concern that this type of add-on might be construed as rebating, many state regulators have ruled that a wellness program is not an illegal practice, leaving the door open for carriers to offer programs designed to maintain the health of their clients.5
  2. The Early Action step is when families try to maintain a delicate balancing act to meet the care needs of their loved one. However, there are many new technologies that can make this stop on the Eldercare Journey easier for everyone involved.

    For instance, the use of artificial intelligence (AI) to monitor a care recipient’s home can provide a variety of help from examining their habits to help diagnosing health problems, to automatically calling first responders for help in an emergency.6 Similarly, technologies like digital document storage platforms are already in use with some carriers and allow care providers to organize information and share it securely.7

    One thing that becomes more apparent during this phase is the onset of caregiving stress, with much of it occurring due to the sense of isolation many caregivers experience.8 Therefore, providing access to the array of support groups available, either in-person or online, can provide a vital pillar of support for client families.9
  3. The Crisis and Claims phases are usually experienced concurrently and are typically the times when client families are experiencing their highest levels of stress and need the most support.

    Because of this, there is a desire for plans that provide a licensed professional, such as a social worker, who can help coordinate the care of their loved one. This type of benefit is something that many families might not think to ask for at the beginning of the journey but will certainly find invaluable in a time of crisis.

    Likewise, complicated claims processes have been called out as tremendous pain points for families trying to manage care. Plans that incorporate simple claims processes will certainly be preferred by client families. Families would likely place a high value on plans that include a designated claim coordinator to assist them through the complexities of filing claims and obtaining benefits.

Where Does This Journey Lead?
As technology in this area becomes more advanced, financial advisors can provide clients with the tools they need for the road, and as we learn more about the terrain, we can guide them toward the best paths to take on their journey. As clients look for more guidance and tools from us, we have the opportunity to expand our role from simply providing a map to one that includes a compass.

References:

  1. 2020 Report: Caregiving in the US, AARP, accessed from Caregiving in the U.S. 2020 – AARP Research Report.
  2. ”Beyond Dollars 2018: How Caregiving Impacts Families, Communities and Society”, Genworth Financial, November 2018.
  3. Anna Rappaport, “The Journey Through Retirement” https://www.soa.org/globalassets/assets/files/resources/research-report/2021/research-journey-retirement-report.pdf.
  4. “Women as the next wave of growth in US wealth management” July 29, 2020, McKinsey & Company, accessed from Women as the next wave of growth in US wealth management | McKinsey.
  5. Allison Bell, “5 Ways to Keep People With LTC Insurance Healthy” https://www.thinkadvisor.com/2021/08/19/5-ways-to-keep-people-with-ltc-insurance-healthy/.
  6. “The future of elder care is here – and it’s artificial intelligence”, The Guardian. June 3, 2021, accessed from The future of elder care is here – and it’s artificial intelligence | US news | The Guardian.
  7. “NGL acquires Everplans, laying a foundation for expansion to become a digital leader in the insurance and employee benefit landscape”, Jan 25 2021, access from NGL acquires Everplans, laying a foundation for expansion to become a digital leader in the insurance and employee benefit landscape (http://nglic.com).
  8. Recognize, Assist, Include, Support, & Engage (RAISE) Family Caregivers Act Initial Report to Congress, RAISE Family Caregiving Advisory Council, Sept. 22, 2021, accessed from RAISE Family Caregivers Act Initial Report to Congress (acl.gov).
  9. 9 Caregiver Support Groups that Help Caregivers in Need, CaringBridge Staff, Sept. 12, 2019, accessed from 9 Caregiver Support Groups that Help Caregivers in Need | CaringBridge.
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