Veterans would be the first to testify that combat fatigue is cumulative and that there are certain events more stressful than others. One example is recurring common frustrations.
As a veteran of the “LTC insurance conflict,” my armor has been worn much thinner in places than is safe or prudent due to these recurring common frustrations. Maybe it’s just that patience is not an infinite resource, and my eternal quest for more LTC insurance sales has apparently exhausted my allotment.
The ability to stop and kindly explain one more time the painfully obvious truth about LTC insurance is rapidly evaporating with my advancing age. Thus, readers of this month’s column please proceed with caution, because this month’s commentary may be unusually harsh.
Let’s start at the immutable atomic structural level. If you perceive yourself as an insurance professional, you have a moral, ethical and fiduciary responsibility to try to help mitigate the potential effect of what can certainly become a catastrophic emotional and financial event. You do not get to choose if you wish to be helpful. The notion that you have an option to even offer the possibility of alternate futures is irrational and cowardly. If you are not part of the solution you are the problem.
Every client’s file should be well-documented with long term care refusal forms: when you first offered the product, when you explained the effects of DEFRA 2005 and exposed assets, when you explained your state’s new partnership plan, and when you offered new combo alternatives made possible by the Pension Protection Act. Hopefully somewhere along the line your clients took action to protect themselves and their family. If not, it’s time to review the ongoing adequacy of their decisions.
There are those who falsely believe they can sit this out and ignore their responsibilities. It is not just a rhetorical question to ask, do insurance companies have an obligation to offer help with this blatant risk? Someone recently suggested to me that the only responsibility left at insurance companies is the bottom line for their stockholders—that it’s just about the money! When I finished “unloading” on the individual involved, he recognized how easy it was to get me stirred up. I reminded him that our industry has always enjoyed special privileges—self-regulation, tax deferrals, tax deductions and tax-free benefits—specifically because of our social obligations and responsibilities. Unfortunately, the antique notions of serving policyholders, protecting widows and orphans, preserving quality of life, and guaranteeing dignity as we age seems to no longer resonate with the perception of companies as pure financial institutions.
I do not want to leave out our actuarial brothers. It’s not just about good math; it’s about reliable math that creates social well-being, safety, security, lifestyle preservation, choice and absolute control of your legacy.
While I’m at it, there are a couple more seemingly perpetual conversational aggravations which are exhausting my dwindling patience. A phantom is more substantial than a ghost because it teasingly offers the possibility of a past, present and future—suggesting the possibility of reality.
Phantom benefits are bad, period. Once and for all, selling LTC insurance without inflation protection in some form is simply wrong. It’s a phantom without a purpose. Taking premiums for younger employees who will most likely never claim benefits is blatantly without merit. Some insurance may be better than no insurance.
Enrolled benefits at the worksite without inflation protection begins as virtually no insurance and ends at the time of claim as absolutely no insurance. It’s not okay, it’s not right, it lacks a moral dimension, and it ends up bad for everyone concerned. At the very least, please sell some form of guaranteed or future purchase options or the lack of internal benefit limitations over time. I am not struggling with being kind about this conversation any more.
And my favorite source of the erosion of my vanishing patience is the whole conversation about rates. What part of accident and health insurance do you not understand? Our industry paid $4 billion in claims last year and many, many more are coming. New products are being priced with .5 percent lapse rates. It’s a sure thing—premiums will continue to rise, benefits offered will diminish and underwriting will become more restrictive. The LTC insurance industry is a permanent, unrelenting fire sale.
You cannot run, you cannot hide, and you cannot ignore your responsibility! Phantom options cannot create concrete solutions. One more time, please look around: LTC insurance sales are again on the rise, as are premiums. Benefits are on the decline, as are underwriting concessions.
What can be absolutely guaranteed is that if you do not do everything in your power to make this sale now, you will spend the balance of your career apologizing for your inaction.
Other than that, I have no opinion on the subject.
