Decisions. We make them all the time—all day, every day. Whether it’s as trivial as choosing what to eat for lunch or as important as whom to marry, what career path to take or where to live, we are inundated with decisions. While some choices are certainly easier than others, each carries its own consequences. As we navigate life the choices we make create opportunity costs, and some of those can have serious implications for our future. Making decisions now about our health care, finances and our futures are increasingly important.
As the population ages and medical technologies advance we are living longer. This increases the chances that we will need long term care services in the future, and higher demand is leading to higher costs. These consequences pose many questions that can lead to deep conversations with clients. Who will bear the burden of providing the care? How will your clients pay for it, and where will they receive it? What would happen if the most important member of the family economy were to pass away during their working years? How will that affect the family? How will the family find its way around the sudden loss of income when there was never a plan discussed, no options or choices given, and no plan was put in place?
Decisions in our industry are significant. Customers choose whether to buy long term care insurance, and financial professionals choose whether to present protection products, such as life insurance or LTCI. Financial professionals may not bring up the subjects of long term care or death planning with the families they serve because doing so can create an uncomfortable conversation. Or the financial professional could present all the options, but then the family members hesitate in making a choice. However, by delaying, over time their inaction is still a decision—one with consequences.
Many individuals wait until they need long term care to decide what their care plan will be. As a former emergency room nurse, I saw this all the time. People would come into the ER after having just had a stroke or other sudden medical issue and had no plan in place to deal with the next steps. This creates a burden on the family, as they will have to figure out what to do after the emergency event. Having a plan in place before a significant medical problem is best.
Oftentimes financial professionals help a family liquidate savings that were intended for retirement. Why do many families realize after the sudden death of their loved one that there was no life insurance, and they are now finding it difficult to make ends meet? It may be because they were presented with two choices. Presented with the choice for life and long term care coverage or to forego these options. Perhaps they chose the latter. Or, was it that their financial professional decided not to present them with the options? So, they ended up with the default plan—nothing.
Although this subject can be sobering, let’s choose to look at the facts. Did you know that, according to LIMRA research, 44 percent of families say they would face financial hardship in six months if the primary wage earner were to die?1 Right now 60 million American households are either underinsured or uninsured, and only 54 percent of Americans have life insurance coverage. And that is down from 63 percent a decade ago. Why is this happening? The average deficit caused by the death of a loved one to the family is $200,000. How is it that more financial services and insurance professionals are not stepping in to fill this gap and having the uncomfortable protection conversations?
These facts and the consequences that ensue should be even more poignant now than they were just one year ago. We have the choice now to be aware of what a unique time in our history we’re in right now. During this pandemic the subject of death is in full view. It has taken the lives of hundreds of thousands of people, and most people know of at least one person who has passed away or been extremely ill from the deadly virus. People are more aware of the need to prepare, and so consumer demand has grown. In 2020, around one-third of Americans say the pandemic was the primary reason they began shopping for life insurance.2
The life insurance industry is responding to the coverage gap by creating better understanding through social media, videos, news releases and other means to generate more energy around planning. Our industry’s leading organizations have put together the “Help Protect Our Families” year-long campaign to build awareness and education about Americans who are underinsured. LL Global in conjunction with the ACLI, Finseca, Life Happens, Million Dollar Round Table, NAILBA, NAIFA and more than 60 working group participants are joining resources for this campaign. It brings to light the coverage gap, the 30 million uninsured Americans and nearly another 30 million who are underinsured. These Americans face the consequences of either not being protected at all or finding they are underinsured and don’t have adequate coverage. As our collective awareness rises, we will realize we have some important choices to make.
We must all make a personal commitment to have these difficult dialogues, even if they are uncomfortable and complex. We must choose to communicate and connect with our clients during this pandemic. This past year has likely changed their level of awareness and heightened the need for life insurance products and long term care services, and they may be more receptive to having a deeper discussion. To guide our clients and not overwhelm them, we can break down the larger conversation into manageable but meaningful connections. As we make the choice to have these critical conversations, we can help our clients make choices that will yield better protection for the futures of all American families.
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