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Cause And Effect – The Last Word On LTCi

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“The long term care insurance industry is barely 30 years old. While some of the early years have been painful, we have accumulated a wealth of information concerning the true nature of the risk we are insuring. Armed with this new knowledge, the way to a bright future is becoming clear.

The quest to find the appropriate balance between the desire to soften the financial and emotional impact of a chronic illness caregiving event and the reality of our evolving understanding of the nature of the claim itself has kept us all busy since the advent of the modern tax-qualified insurance offering. With the depth of claims experience now available, our recognition and evaluation of that rapidly expanding experience and knowledge base now allows…”

Click here for the full article, originally published in the November 2016 edition of Broker World Magazine.

The Reports Of My Death Have Been Greatly Exaggerated – Mark Twain

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“Much the same could be said about the long term care insurance industry, but first these headlines:

  • There are more options for long term care insurance products/planning solutions today than in recent memory.
  • Three distinct classes of policies/programs have risen from the ashes of the long term care insurance heyday of the mid-2000’s:
    • Traditional
    • Hybrid and Linked
    • Long term care planning for people who failed to plan
  • The game will be won by proactive agents and BGAs that focus on the consequences of not planning for an extended care event (thank you Harley Gordon), and by fitting the right client to the appropriate liquidity and underwriting solution.

Pollyanna I am not.  But a clear-eyed view of the shifting tectonic plates in the world of long term care planning informs me that much positive energy and change is upon us.

A high-level perspective of the situation indicates that public policy concerns and private sector innovation are actually beginning to help consumers.  Federal and state initiatives are focused on…”

Click here for the full article, originally published in the November 2016 edition of Broker World Magazine.

Profitable LTCi Sales: 4 Primary Items You Need To Know

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Traditional long-term care insurance placement rates have plummeted over the past 18 months due to more rigorous underwriting requirements. Declines on one spouse or the other and policies issued at rate classes greater than applied for have caused a spike in policies not taken or accepted by one or both of the insureds. The consequence of this is lost profitability to the producer and general agent.  We spend untold hours running quotes on prospects without the faintest idea if they will qualify for coverage due to health reasons; additional time and resources processing the cases; and countless hours talking to underwriters on the phone trying to get them to change their minds in a no-wiggle room environment. Ultimately, the producer aggravates potential new customers or alienates existing clients.

The reality is that producers and general agents don’t make the rules. When companies across a market segment harden underwriting we have two choices; find another product to sell or adapt tactics. In light of the fact that many of us are committed to long-term care planning – how can we continue to help consumers in this difficult environment? There’s a simple answer; get better at field underwriting the clients’ health profiles before beginning the quoting process.

This not so revolutionary concept is easily accomplished by any producer or advisor. A brief review of one or two insurance company underwriting guides will provide the basic questions one needs to ask prospects and clients. Most general agent marketing teams also have a one page health questionnaire that can be used to guide producers through the primary issues that impact long-term care insurance underwriting decisions.

The four primary items one must know are:

  • Height and weight
  • Tobacco use
  • Recent major health issues or surgeries that may be pending
  • Current prescription medications being taken – very important as it is indicative of what may be ailing someone

With this basic information the general agent’s marketing team can zero-in on insurability and/or rate class.  They can also recommend the insurance company that is most likely to look favorably on the prospect’s health issues. The producer appears professional because they’ve done some meaningful research for the client, and the chances of an unexpected underwriting decision are mitigated.

My marketing teams tell me that “producers just want to know how much LTCi costs.” Candidly we cannot answer this question, with a reasonable level of accuracy, unless we know what sort of health conditions the prospect may have.  One of my mentors used to say that long-term care insurance is an inherently sub-standard market since we’re dealing with older consumers. This was when the average age of issue was 67. Today the average issue age is 56, but with modern medical technology and drug treatments disease processes are identified earlier and most people are taking some sort of prescription medication.

Doesn’t it make sense to ‘put the horse in front of the cart’  by getting basic vital health information from the prospect before a proposal is presented?  Who wants unpleasant surprises after the fact?  The process goes much smoother, everyone’s valuable time is not wasted and selling long-term care insurance becomes a profitable endeavor.  Contact us for further assistance.

LTC Expenses: Who’s Your Daddy?

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If you can’t pay your long-term care expenses, then you have a friend in Pennsylvania! Just ask John Pittas, who found out the hard way. His mother, Maryann Pitta, had to undergo rehabilitation treatment with skilled nursing care following a car accident in September, 2007. When she was recovered and released in March 2008, she decided to relocate to Greece having paid only a small portion of the bills she owed from her stay at the care facility. In May at the facility, unable to reach Ms. Pittas, she instituted a filial action suit against Mr. Pittas under state code 23 Pa. C.S.A. Sec. 46, entitled Relatives’ Liability and which read (in part):

1. The following individuals have the responsibility to care for and maintain or financially assist an indigent person, regardless of whether the indigent person is a public charge:

  • The spouse of the indigent person.
  • A child of the indigent person.
  • A parent of the indigent person.

2. Paragraph (1) does not apply in any of the following cases:

  • If an individual does not have sufficient financial ability to support the indigent person.
  • A child shall not be liable for the support of a parent who abandoned the child, and persisted in the abandonment for a period of ten years during the child’s minority.

After arbitration, a non-jury trial, and an appeal the court held Mr. Pittas responsible for his Mom’s remaining obligation to the health facility to the tune of around $93,000. The case could be a wakeup call of sorts for those with relatives, especially children with parents, who are in need of medical care and think they don’t need to be involved in planning for such contingencies. A few points of fact from the trial are eye-openers:

  1. “Indigent” was not defined as just those who are destitute, but as anyone without sufficient means to pay for their own care and maintenance.
  2. It did not matter that Mr. Pittas had other siblings who could have shared in the support. If he wanted them to accept some of the responsibility, it was up to Mr. Pittas to join them in the suit. It wasn’t the obligation of the health care facility to pursue them all collectively.
  3. It didn’t matter that Ms. Pittas had initiated, but not completed, the application for government support. The health care facility was allowed to take action against Mr. Pittas without seeking resolution of the application for assistance.
  4. Mr. Pittas was shown to make around $85,000 a year which was found sufficient to obligate him under the law for his mother’s expenses, but didn’t help in suggesting what might be the lower limit that would exempt a relative from responsibility under the law.

Two-thirds of the states have filial support laws. A useful summary of state-by-state citations can be found on the website of Dickinson School of Law professor, Katherine Pearson at http://law.psu.edu/_file/Pearson/FilialResponsibilityStatutes.pdf. This will assist in demonstrating to a client the need to be involved in planning for the affairs of relatives for whom they may unknowingly be responsible.

Call us for information regarding the steps and the products that are important for avoiding these types of unexpected liabilities that can confront your clients.

Secure Your NGL Contract With Broadtower TODAY

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As a reminder, for those of you who have requested or completed contracting with NGL already, you must complete the NGL-Broadtower form at the button below to ensure your production is bonus eligible through Broadtower’s compensation program.

Broadtower & NGL Life Declaration Form

For those of you who haven’t requested contracting, please complete and submit the form at the above button as well as request a contracting packet at the button below.

Request A Contract

It’s Never Too Late – The Last Word On LTCi

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“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…”

Click here for the full article, originally published in the October edition of Broker World Magazine.