Time worn clichés do have a way of appearing on a regular basis in this column. I am only marginally contrite but I do apologize. It’s just the convenience of immediately defining exactly the concept you are trying to illuminate. “Timing is everything!“ As a consultant to insurance companies since 1988 and a veteran of the chronic illness wars, this is the one truth I know above all others. You must be “ready” to sell or subsequently buy. Truthfully it never really matters how great an idea you may have to offer. If the circumstances surrounding the desire to take action are not ripe and fit almost perfectly into the current reality of the company or the consumer nothing meaningful is going to happen.
Our industry’s historical attempts (and I believe honest and valiant ones) to solve the chronic illness in America conundrum certainly fall into this time worn and experience tested pattern. There is much we have learned, and much of that learning has been the hard way. We know this is the exposed risk that will not go away of it’s own accord. I have seen estimates concerning the cost of caregiving for the boomers exceeding 10 trillion dollars and yet we remain almost completely unprepared for that absolute certainty. A pending financial and emotional train wreck of cosmic proportions. We have actually done a fairly good job of helping those with money who have been directly or indirectly exposed to the caregiving conflagration. The number thrown around is about 10 percent have chosen wisely to protect themselves and their families. We simply cannot remain unconcerned about the other 90 percent who did not make those wise decisions earlier in their lives.
When that claim finally arrives, it is the adult children that are huddled together to find the funding to provide the highest level of care they can afford. This is that moment in time and space when you do not need to explain need or quote statistics or attempt to explain an ever expanding inventory of insurance products that attack the problem. I cannot imagine a more precipitous moment to have a conversation about making sure that their own children do not find themselves in exactly the same dilemma in 15 to 20 years. We have always known that those directly exposed to scrambling to assemble adequate and sustainable funding are the most likely to buy protection for themselves. They understand that outliving your savings is more than just a speculative worry. After my mother joined her “care community” of choice (because her brilliant insurance agent son encouraged her to buy a lifetime benefit with five percent compound inflation protection policy in 1999) her most frequent philosophical question was, “Why am I still here?” That was followed immediately by “Did my reimbursement check from that insurance company arrive?” so she could make her $6,000 monthly payment to the ALF on the first of the month when it was due.
I must strongly encourage all insurance professionals to never again tell someone confronting the reality of the cost of care that it’s too late... that there is nothing you can do to help. Even for those who did not plan ahead, did not take our advice, refused to believe that this would happen to them, there are now multiple answers to help facilitate large and persistent needs for money. Each and every potential source of funding should be examined. Remember you are only looking to supplement existing assets and income to provide the highest level of care. Are there assets that could be enhanced and payments guaranteed by using an underwritten SPIA? Are there life insurance policies that can be converted to caregiving dollars either by accessing existing benefits within the policy or looking at a life settlement designed to maximize caregiving dollars? Have you adequately examined the possible eligibility for receiving Veterans benefits? Have you carefully considered a reverse mortgage? Can you help with cash flow concerns by recommending a “bridge loan” until all financing is in place?
Now, I know these are not perfect answers. The perfect answer was to buy insurance when you were younger and healthier. The only way to avoid the funding struggle outlined above for the children of the adult children now lining up with pails of money to try to put out the fire, is to stop and take action on themselves right now. Placing yourself in the right place at the right time to have the right conversation is our mission and that timing has always defined our purpose.
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.