Human nature continues to get in our way. But of course this perpetual uphill battle defines our chosen profession. What I would like to suggest is that this remains a double-edged sword. Perhaps the greatest flaw in our sales history is the propensity to sell what arrived in our briefcase at the moment of a sales presentation. Convenience and expediency continues to threaten our basic fiduciary responsibilities.

Let’s begin with the largest mystery that clouds current sales results. Combo life sales will represent 90 percent of extended care risk solutions in 2019. But what was the true nature of that sale? Was it simply a traditional life sale with long term care/chronic illness furnished as an “add on,” or was it offered as a direct alternative to a request for help with that specific risk abatement? Was the sales conversation a comprehensive one in which all alternatives were described and offered?

My concern is simply that we cannot clearly identify from existing research or sales trends how and why a sale took place. When we stand confronted by a clear future risk that the consumer probably originated as an insurance conversation—what happened next ? We assume at least some level of basic financial analysis and planning takes place to justify insurance need and premium commitment suitability. Now how does that translate into a specific product offer?

Here’s what we do know from Broker World surveys and LIMRA Life Combo Review:

  • The Upper Middle Class is virtually the only recipient of our sales efforts. Stand alone sales correlate directly to assets and income.
  • The affluent tend to buy asset-based products with “lazy money.”
  • Most consumers do not plan to consider long term care planning until at least age 55.
  • Conversely, consumers under 55 are more interested in combo life.
  • Producer preference is also clear. Long term care specialists prefer stand-alone as the best premium leverage. Financial advisors favor combo life and asset-based advisors favor single premium, while life insurance sales professionals prefer chronic illness riders as a sales enhancement.

I have participated in a number of “live” agent training sessions with a focus on all methods of confronting this risk and the largest contingent of those in attendance are those who “used to sell LTCI.“ What now lies at the heart of new sales? What, if any, are our responsibilities to describe alternatives and how each one might address a consumers specific risk abatement? I can visualize in my dreams a producer coming to that proverbial fork in the road with multiple choices and trying to evaluate which choice will lead them home safely and expeditiously.

I understand that the logical choice must be the one with which they have the greatest knowledge and familiarity. However, I would be remiss if I did not point out the obvious—that this prejudiced decision process may not have occurred in any one’s best interest.

I am also not convinced that intentionally restricting sales to those least vulnerable to the financial ravages of a need for extended custodial care serves our universal desire to reduce this potential risk. Confining our sales efforts almost exclusively to the most affluent is, first of all, a diminishing resource and, more important, does not in any way open up future sales. Furthermore, if we do not add an aggressive supplemental sales approach to the risk, we cannot drive this sale deeper down into the middle class. In other words, our goal must be to do all we can to help maintain private pay status for all the consumers we engage. Adding a smaller cash flow to existing retirement income instead of defining every sale as a catastrophic risk that must be covered by a large insurance commitment must become our new mantra.

The bottom line is that comfortable, convenient and familiar should be declared public enemies. A demand that sufficient planning must precede any advice on product direction, complemented by an open mind containing the professional flexibility required to justify those decisions. All possible choices must be hard wired into our behavior if this is ever to become anything more than a boutique sale.

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: ron@icefloeconsulting.com.