I am perpetually amazed at the degree of cognitive dissonance stirred up in my own mind every time I ask myself this most basic rhetorical question: “How can anyone in their right mind ignore the probability of an expensive and extensive need for care?” The absolute unvarnished truth is that no matter how well you have constructed your plans for retirement and the disposition of your estate, an extended need for custodial assistance can blow up all your carefully crafted expectations. A lifetime of savings and financial planning for retirement hopefully culminates in an introspective consideration of a classic estate plan that defines how assets are to be transferred to the people to whom you wish them to go, and when and under what circumstances you want them to go there. Wills, powers of attorney, medical directives and trusts establish the mechanics and basic structure. Insurance strategies should then arise to facilitate the preservation of assets, leverage risk more economically, address issues of fairness and ameliorate potential taxes.
After all that careful introspection, family soul searching, insurance leveraging and brilliant financial planning, why would anyone leave such a well thought out structure twisting in the wind of a highly possible catastrophic risk? Why would anyone question the validity of building a firewall around that plan? To paraphrase our good friends at CLTC “What is your Plan to protect the Plan?”
How can anyone governed by fiduciary obligations avoid a conversation about chronic illness risk? More important, why would an insurance professional not only avoid a clear and present danger to everyone’s hard work, but apparently blindly step away from the opportunity to review and illuminate possible insurance solutions and product revisions particularly in the light of the available plethora of combo policies that now come in all sizes, shapes and dimensions?
Readers of this column recognize that LTCI has never been the main insurance event—we have always seemed to turn up further down a client’s dance card. It just seems there may very well be some major considerations that have been overlooked. Therefore, in no particular order of significance, I humbly submit for your consideration:
Build it, leverage its purpose with life insurance, and then demand that the big bad wolf stalking the caregiving landscape continues to need an inhaler.
Other than that, I have no opinion on the subject.
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: firstname.lastname@example.org. Website: www.BroadtowerInsurance.com.