The Great Disconnect

We just keep poking at the mystery. Logic continues to demand of our experientially wired brains that we could and should be able to connect the most clearly perceived dots. Therefore it is impossible to not speculate that the current most visible features of this miserable pandemic should, at the least, help us better focus on our sacred mission. Unfair and premature mortality should ride like the Four Horsemen of the Apocalypse through all our dreams. In tandem with that nightmare hovering at the edges of our consciousness is the potential personal intensive care and iron clad isolation currently being required of far too many. I can only hope and pray that this sure and certain knowledge may finally contribute to more American consumers taking action.

There is current survey evidence that consumer awareness is on the rise. Genworth recently released the COVID 19 Consumer Sentiment Survey. Approximately one-third of those surveyed said they had already begun to take action to be better prepared. Two-thirds recognized the vulnerability of their loved ones. America and the world have all become daily caregivers of themselves and those requiring assistance. The survey confirmed this overwhelming shift in focus with one in three having become “overnight” caregivers of all those dependent on the help and support of others. We know that the cost of caregiving is a double edged sword. The problem has become all too real with one in four concerned about their financial future and half of those surveyed experiencing emotional distress.

Now, forgive me, but all the still functioning synapses of my brain would suggest that this painfully obvious revelation should certainly lead to definitive buying behaviors. Aren’t we, after all, an industry that prides itself on helping others visualize the problem, then helping determine its magnitude, leading to taking preventative measures in a timely manner to blunt the risk? This has always been our shining truth, the mantra of our mission, and it has held true—right up until we dared to challenge what in my mind represents America’s largest unprotected risk: Long term care. Long term care risk is just different.

Our industry has a couple of very illuminating longitudinal studies: The
LIMRA /Life Plans Buyer Non-Buyer Survey and LIMRA Insurance Barometer Study. The most recent 2020 evidence from the latter again illuminates our persistent conundrum: American adults understand mortality, with 54 percent owning some form of life insurance; and, Americans understand morbidity, with 85 percent owning health insurance. It is the kissing cousin risks (disability and long term care) that remain unable to connect the dots between understanding the need and taking action to deal with it.

At 61 percent perceived need vs. 18 percent ownership, long term care represents the greatest disparity between perception and reality. The acceptance and acquisition of combo policies continues to strengthen. There is an interesting subset of perceived consumer purchase reasons for the growing popularity of combo sales. There is a perception that these products allow them to make economic decisions about the protection of their resources. It alleviates a general anxiety over future expenses and specifically it prevents having to buy two policies for the same purpose.

These are certainly insightful findings. However, please again bear in mind the effect of cognitive dissonance. As we continue to try to understand perhaps the greatest mystery of our times, we must remember that there are three parts to understanding what happened during the buying process. First, what are the buying predispositions? In other words, what do consumers “say” their preferences are in order to be willing to buy? Existing surveys do help identify a perceived wish list. Second, we do have good data telling us what consumers “say” were their rationalizations for buying. But, ultimately, the critical missing piece of the puzzle is what actually happened between these two perceptions. We need to determine what actually happened to convince them to buy.

This answer must come from those successful advisors in the trenches on the front lines making it happen. We need precise laser analysis to understand the motivational forces that are actually moving us forward. It is the only way we can hope to change the persistent intransigence of The Great Disconnect.

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: