The Last Word On LTC...
Ronald R. Hagelman Jr.
October 2018

I am not going to stand on the deck of an aircraft carrier and proclaim a premature cessation of all hostilities. Chronic illness in my humble yet persistent opinion remains America’s largest unprotected risk. To a large extent we still have an industry with its head deep in the sand hoping the approaching storm will somehow magically pass quietly around them. Where a celebratory salute does need to take place is in honor of those brave, patriotic and prophetic corporate citizens that have at least ventured out at night to wage a growingly successful campaign against the known and certain evils  of chronic illness still imbedded deep within the psyche of a financially vulnerable and woefully unprepared American public.

Let me begin again by reminding you it’s time to change your vocabulary—please!  It’s not “long term care”—it’s long term services and supports. It’s not a “facility”—it’s a care community. This is about caregiving for chronic illness! If you have to talk to describe the problem, try talking about the real and expensive need for “extended care” (a term  I borrowed from one of those good guy companies).  The sales conversation has come full circle from where it began as the generations have shifted over the last 20 years. It is not just about protecting assets. It is about freedom of choice, quality of care and control of your own claim’s destiny. Few if any have not now been touched by the problem.  As far as I’m concerned you can forget about the Millennial or Gen-X consumers until the group market returns with strength and purpose. (An actual real possibility.) For now our market is the heart and soul of the Boomers precariously juggling care for parents, financial support for adult children and the almost  palpable fears of inadequate savings, surprising potential longevity, and the clear and certain knowledge that a medical or care expense could implode all their existing planning.

Chronic illness is like acid rain and there is no shelter. Four out of five American adults over 50 suffer from at least  one chronic condition—70  million. Diabetes is up from 15 percent in 2005 to over 22 percent and rising. Middle age Americans age 55 to 65 have a lifetime risk of 90 percent for hypertension. It is my understanding that the number one reason for LTCI declines is height and weight, specifically because those that are obese will have  a two-thirds chance of developing a serious chronic illness. And that all boils down to this: Nine of the top 10 health conditions are “chronic” and over 85 percent of all health care spending is for chronic conditions. Our brave new world of insurance sales is about chronic illness. Recent consumer surveys should have seared the concept in your mind. The majority of Americans would rather die than go anywhere near a nursing home.  

Now I am going to unapologetically repeat myself again. In point of fact it may have to become a permanent component of this column. There are three sales. Three directions to approach the problem. Each of the three attacks the problem from a different direction and responds directly and effectively to a separate sales cohort. Each and every one of them however has exactly the same goal—leverage risk with insurance instruments designed for that purpose, help the customer receive the highest possible level of care when needed, and do everything in our power as care advisors to help the client remain as long as possible a private pay consumer in control of the location and circumstance of his care:

  1. Our more affluent citizens need to continue to replace the risk with insurance. I’ve never entered the argument about which is best—stand-alone, or combo life or annuity—and I won’t start now.  Each has its strengths and weaknesses.  Just do something!
  2. Find a way to supplement existing income so that there will be sufficient cash flow when needed. The mass middle market still awaits your attention and resolve. Please stop just asking, “How much is enough?” Focus on how little it takes to add to what you have to stay free!
  3. Over the last 20 years we left 54 million behind. They too will face the inevitable. There is a growing  market and multiple products available to help even at the point of need. Your responsibility to be helpful did not end when they chose not to buy. Point-of-need care funding solutions remain a fiduciary responsibility.

Now for the good news back on the deck of that aircraft carrier. Since I do not pay for LIMRA statistics you will have to accept the following “general and generic” statistics as rumor and innuendo. I continue to suspect that life combination products represent the only ”bright spot” in the entire life market. Life combo sales seem to have had double digit increases four of the last five years. I have heard that average premiums continue to rise. And the rumor with the greatest fanfare I have heard over cocktails is that when you view the market as a whole, including stand-alone, life with long term care, life with chronic illness, and all the various incarnations—80 percent of the only signs of life in a stale life market were combo life.  We are back from the brink. Over a hundred companies again make some attempt to join the fray and engage the enemy. My most heartfelt congratulations to the individual and corporate heroes who never gave up. God Bless.

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: [email protected] Website:

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