“A very short 16 years ago the promise of stand alone LTCI was shining brightly. We had directly addressed a pressing need with the help of a clear cut legislative mandate. Over a hundred companies had flocked to our cause. Sales growth had been steady since HIPAA. In marketing staff meetings across America we congratulated each other on our marketing wisdom and optimistically predicted continuing successful growth. And then quite frankly our chickens began to come home to roost. There was simply much we knew and conveniently misplaced in our minds:
- This was health insurance after all and would be subject to claims experience. I remember vividly standing at the first ILTCI Conference at that initial cocktail gathering hearing many wish we had more claims experience. Careful what you wish for.
- We knew sales drift to more affluent customers as time goes by. We knew big premiums and big commissions were a well known and potentially dangerous siren song, but the music was so sweet we could not resist.
- We knew this was a contingent liability but the cost for catastrophic coverage was so competitive when measured against the potential risk, why not just sell life time benefits with five percent compound inflation protection? And so we overloaded the boat.
In fairness, there was also much we could not possibly have seen…”
Click here to read more, originally published in the November 2019 edition of Broker World Magazine.