My Personal LTC Story About the Cost of Waiting to Plan

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ASK THE ACTUARY - As seen in Broker World Magazine and CLTC Digest in the June 2019 publications.

Dear Actuary,

I was hoping you could help me with this opportunity. I will be interviewed for 15 minutes on a television special about long term care. I can put the replay clip on my website, YouTube, and social media. What should I tell the TV audience? At this point in my 20+ year career, I want to promote myself as an LTC planning specialist, since it differentiates me from those that offer life insurance and annuities, and I want to help more people!

Marketing in Michigan

Dear Marketing,

Congratulations on this fantastic opportunity. I’m sure you will do a great job educating your audience about LTC planning, but I urge you to begin by telling a powerful story. Use your story as the canvass to paint the picture about LTC planning. Top agents tell stories about client experiences as their most effective and memorable educational tool.

Stories evoke emotion, build trust, and allow you to connect with your audience. When they are short and engaging, stories allow you to put your expertise and point-of-view on display. To demonstrate the power of storytelling, please allow me to tell my own personal story.

As an actuary, I’ve spent more than 10 years of my career designing LTCi products. Recently, I got my insurance license to refer my friends, family, and other advisors with the best insurance specialist agents in the country.

What I didn’t realize is that getting my insurance license would lead to a chain of events within my family that is still unfolding to this day. I would like to share this emotional roller coaster with you and the important lessons learned.

Recently, my phone rang, and it was a close relative named Colin. Colin is a doctor and a leading expert in his field. Amy, his wife, listened to our conversation. "Your dad told us you got your insurance license,” he said. “Could you help Amy and I with our long term care plan?"

I explained to Colin that I would prefer to refer him to a top specialist. He might find it uncomfortable for me to ask intimate questions about his health and finances.

He assured me that he was comfortable disclosing these things to me, and I felt confident taking the case. It might even make for a good story.

He began to tell me why he needed LTCi. Suddenly, the realities that I have heard from many LTCi specialists played out before my very eyes.

Wisdom Born from Personal Experience (the author is the boy in the front row center)

"As you know,” Colin began, “your Bubbe and Zedde (my grandparents), both needed long term care for many years. You saw the impact it had on our family. Deciding who would care for them when everyone lived across the country was heartbreaking. Some of the toughest caregiving years at the end were borne by your mom.”

“Zedde was a kosher butcher who was built like an NFL linebacker,” he said. “In Poland, during World War II, he was able to manhandle the guards and escape the train to Auschwitz; however, he could not outrun the ghosts of the Holocaust that caused him mental illness after the war. Our family would wake up to the screams of his nightmares of Nazis chasing his family through the woods. He eventually suffered a stroke, which caused him to lose function on the left side of his body.”

As I listened to Colin, I recalled how Bubbe also suffered a stroke and required care. She lived with my family for five years when I was in high school. I watched my own mother give up her quality of life to provide round-the-clock care for my Bubbe. The stress and physical burden of managing the caregiving on her own took a physical toll on my mom’s health.

Colin continued, “We don’t want our kids to suffer the way we did caring for our parents. Although we considered buying long term care insurance in the past, we have not yet decided to move forward it.”

“Why did you delay purchasing?” I asked. “What were your concerns?”

“Our financial advisor told us that we have enough assets to self-fund the risk. He just wasn’t sure if LTCi was worth the cost. We are comfortable about our retirement income, however, each year the pressure to make a decision keeps growing."

Explaining the Options

I’ve heard the self-funding option as told to me by other LTCi specialists before. It never made sense to me. Wouldn’t you be more interested in taking risk off the table, the more assets you have?

I explained to Colin that you can never have too much money to consider a long term care plan. Insurance can be the foundation for a plan even if it covers part of the costs and is combined with self-funding.

There is financial value and often unbeatable insurance leverage. For business owners, there is often the ability to take a tax deduction on the insurance premiums. However, the most important reason for an LTCi plan is to protect your family from taking the burden of caregiving upon themselves – like my family did for my grandparents.

“Amy and I don’t want to be a burden to our children,” Colin continued. “Amy’s father lived until he was 98 and needed care for nearly 15 years due to Alzheimer’s. We’ve also delayed purchasing because we heard that insurance is too expensive and there might be rate increases.”

“We can find LTCi that’s right for you,” I responded. “There are many different types of LTCi these days. There are plans that can be prepaid, and others that offer guaranteed premiums. Even the traditional lifetime payment options are worth considering because they are more conservatively priced than in the past. We can build a customized plan that offers excellent value. If you are still interested, let me put together a couple of options.”

Colin and I corresponded over the next few days. I interviewed him about their needs, health, and financial situation.

Based on their great health, I was able to find them an LTCi product that offered superior longevity protection at an excellent value. Colin and Amy were so delighted about the value proposition that they considered increasing coverage to more fully cover the future cost of care. They even elected to have the premiums paid in full on a shorter schedule using the product’s 10-year premium payment option.  

As we discussed the underwriting and application process, I learned that they were currently traveling and wouldn’t return to their home state to sign the application for a month and a half.

I said, “Heaven-forbid any health issue should happen to either of you before you’re back home. You might not be able to qualify for this coverage.”

While this always felt like a sales line to me, something happened next that I had not expected.

The Cost of Waiting

Two weeks later, my mom called, and I could hear the quiver of fear in her voice. “Colin and Amy were at the gym, and without warning, Amy suddenly collapsed. I wanted you to be the first to know because you had been talking to them recently about their LTCi plans.”

I soon learned Amy had suffered a brain aneurysm.

Three things raced through my head during that initial call with my mom:

1.      First, will Amy survive?

2.      What if she needs long term care?

3.      I’m thankful that I got a chance to talk to her two weeks ago.

Inside the Numbers

Insurance agents tend to be analytical types. We spend much of our training learning price and product, features and benefits. Yet, at the earliest conversations with prospects, stories matter much more than numbers. Consider that this is a statement coming from an actuary.

The Bottom Line

Stories build trust, and trust is your most valuable asset as an insurance specialist. So, be authentic, and tell your personal story about why LTCi matters to you.

You can tell your clients’ stories too even if you protect their identities. Writing down these short stories and publishing them on your website or social media accounts can captivate your audience. They will feel compelled to connect and share their personal stories with you too.

Your stories can have happy endings. Did you think I wouldn’t finish my story?

Amy has recently been released from the ICU and is recovering extraordinarily well. A little luck played a role in her recovery. In the ambulance on the way to the hospital, Colin – the doctor, chose the best neurology hospital in the area. The surgeons repaired Amy’s aneurysm using a cutting-edge procedure.

I may not be able to get Colin and Amy their LTCi Plan A, but I have several ideas on a solid Plan B. Luckily, they are working with a specialist that has many tools, carriers, and products at his disposal. After all, the best plan possible is more important than the best possible plan.

Sincerely,

Marc Glickman, FSA, CLTC, LTCP

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