On a recent conference call discussing a possible future topic with a “panel of experts,” I heard a serious and knowledgeable voice suggest that we need to discuss “what is wrong with long term care insurance.” This was again one of those times I had to hit the mute button and compose myself before responding. I kindly but firmly suggested I would be happy to help with a presentation about “what is right” with long term care insurance.
Each year through our national distribution I am extremely proud that I can contribute to helping thousands of Americans insulate themselves from the ravages of being unaware, unprepared and uninsured. I see nothing wrong with having dedicated the most recent 17 years of my life to convincing others to accept the wisdom of not ignoring the risk of dying without dignity by exposing themselves to the distinct possibility of losing complete control of their own care and impoverishing their own families and their estates in the process.
I see nothing wrong with an industry that has constantly had to respond to a moving target of needs, benefits and care delivery, yet continues to deliver new and creative product alternatives. America is aging, and individuals as well as their representative government remain unprepared and stubbornly uncommitted to dealing with the social and cultural changes created by our mushrooming age 65-plus population.
Long term care insurance has evolved at a steady and responsive speed. Our industry has adapted to changing circumstances and continues to adjust its marketing strategy. Agents and companies have continued to try to find ways to help mitigate an enormous risk. The only problem I see is the sheer magnitude of the problem. When faced with an overwhelming enemy force, history has taught us not to confront them head-on but to whittle away at their defenses with a relentless and well-planned guerrilla attack.
There are not one but many LTC insurance markets, and those markets are also evolving and responding to changing circumstances. Each marketing approach is attacking the enemy from a different direction.
There is nothing wrong with an individual LTC insurance market that adds protection for more than half a million or more Americans each year with substantial comprehensive policies averaging more than $2,200 of premium. There is nothing wrong with an industry that paid out $6.6 billion in claims in 2012—all of which was aimed at maintaining the freedom to choose the nature, substance and circumstance of the insureds’ own personal care. I see nothing wrong with the most consumer-persistent health product ever designed. I have never seen a product more responsive to consumer demand for enhanced benefits.
I see nothing wrong with a multi-life market responding to too much success. The industry has not given up on worksite sales—if anything, I view it as a strategic retreat designed to fall back and regroup. We still have options, we are just not going to turn too many underwriting corners on our way to more and greater payroll deduction opportunities.
I see nothing wrong with a thriving and rapidly expanding combo life and annuity market. Almost all front-line life companies now have some form of chronic illness rider. Single premium LTC insurance combos are approaching several billion of new premium each year. The majority of permanent life policies have some form of accelerated death benefit rider.
I see nothing wrong with an industry that is building an arsenal of products that can provide some level of protection to approximately 40 percent of those who want LTC insurance coverage but cannot meet underwriting thresholds. We have life products offering chronic illness benefits utilizing only mortality considerations. We have combo life products offering a blended mortality/morbidity underwriting process. We have annuities enhancing payouts for nursing homes—even on a guaranteed issue basis. We have companies now offering smaller specified defined benefits policies with very limited durations, all with seriously abbreviated underwriting. And we still have stand-alone LTC insurance companies that specialize in taking clients with mild impairments.
I see absolutely nothing wrong with an industry that fights the good fight with the weapons and ammunition at hand. I see nothing wrong with an industry whose field force, by definition, cannot be just order takers because clients must be professionally counseled and advised about benefits options. I see nothing wrong with an industry that requires training and expertise.
What I do see is much that is right!
To all my fellow freedom fighters: May the new year be your best ever. May your customers flock to you and immediately accept the wisdom of being prepared. May we all continue to respond to the need and the risk of care injustice. And may we each remember that regardless of how we approach the problem—all our efforts do matter!
Other than that I have no opinion on the subject.
