The Last Word On LTCI...
It's Never Too Late
Ronald R. Hagelman Jr.
October 2016

This column has always been neutral and generic when talking about product, particularly in terms of innovation and market direction. I now have the privilege if imparting some very exciting news. However, I need to disclose at the beginning that my company and I are deeply and personally involved in this month’s subject matter. It can surely never have been a secret that, like the readers of this column, I have the honor of earning a living helping others protect themselves against the emotional and financial ravages of chronic illness. I know my passion to reach as many as possible is shared by those who read this column.

Our most persistent curse has been that far too often we have to tell someone we care deeply about that we are unable to help .

For whatever reason or rationalization they failed to plan ahead. They waited too long to take action and their health has turned too many corners. They had not yet been touched by the angels of caregiving need. Myopic perceptions of insurmountable obstacles, real or imagined financial barriers and ignorance of the caregiving dangers that lie just beyond the horizon prevented them from making an early decision to build the necessary insurance fire wall. It was just too damned late.

Never again does that have to be true! There are now a growing number of answers—the advent of a strategically placed market is at hand. New and exciting opportunities to be helpful even on the day the circle of loved ones looks up knowing a claim is now imminent and asks “How are we going to pay for needed care?”  At the point of claim any and all potential sources of financial support are evaluated in terms of how they may best impact the desire to maintain control, avoid government manipulation and provide the best possible care setting. The question becomes:  “How can I  leverage what I have?”  Innovative approaches are currently being “Beta” tested. America’s historically largest provider of stand-alone LTCI is in the process of introducing a new medically underwritten single premium immediate annuity  designed specifically to respond to longevity issues inherent in care settings. Guaranteeing enhanced payments based on caregiving experience is new to our market but has been a staple of the British terminal funding market for many years. Taking existing assets and increasing their inherent value for the purpose of care is a logical extension of any planning process.

Fiduciary concerns should arise any time a life-only settlement is selected. This is being directly addressed by requiring a “Certification” process conducted by the carrier. I believe there are potential advantages at both ends of the economic spectrum. Those with limited assets available for caregiving expenses can simply take the monies that were already dedicated to caregiving expense and stretch their effectiveness to maintain independent caregiving choices. Those with substantial assets can use this approach to “cap” the potential cash drain exposure to the estate.

In addition, we have partnered with a well-known life settlement company that has been working for 10 years to  apply  those dollars exclusively to caregiving purposes. Seniors own over $500 billion of life insurance and 88 percent lapse or surrender their policy for little or no value. Converting that potentially lost or dormant value into guaranteed caregiving cash flow is an option that should be carefully evaluated every time. Again, you are leveraging an existing asset through a caregiving medically underwritten prism to maximize the return. This planning  option also requires a specific “Certification” process.

 Just recognizing that I can now have a meaningful conversation with anyone in need of help transforms my practice. It does not diminish my desire to sell more long term care protection. However, simply knowing it is never too late changes everything.

Other than that I have no opinion on the subject. 

Author's Bio
Ronald R. Hagelman Jr., CLTC, CSA, LTCP
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 is president of Broadtower Insurance Solutions, a national IMO helping BGAs enhance LTCI production. Hagelman can be reached at Broadtower Insurance Solutions, Inc., 156 N. Solms Rd., New Braunfels, TX 78132. Telephone: 830-620-4066. Email: Website:

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