Lincoln
Financial executives want to see awareness month lead to action month
Nov 02, 2016 | By Allison Bell
Long-term care
planning specialists headed into the 2016 Long-Term Care Awareness Month Tuesday
knowing that being aware of the time bomb ticking in the corner is different
from doing something about the time bomb.
The Westlake
Village, California-based American Association for Long-Term Care Insurance has
come out with a new awareness month marketing kit. The kit includes marketing letters
and other materials association members can use to get prospects to stop
wondering dreamily about what might happen when they get old and prepare for
the reality that they're likely to get old.
Many
distributors of traditional stand-alone long-term care insurance and related
products, such as hybrids that combine life insurance with long-term care
benefits features, or annuity-LTC hybrids, have posted press releases, sent
calls to action out on Twitter and Facebook, and organized events aimed at
retail agents, brokers and other people who work directly with consumers.
The Council of
Disability Awareness is hoping agents will be thirsty for prospecting ideas.
The Silicon
Valley chapter of the National Association of Insurance and Financial Advisors
has scheduled a luncheon course for
Nov. 17 on a number of long-term care financing options, including long-term
care insurance, life-LTC hybrids, and life policy accelerated death benefit
provisions.
Radnor,
Pennsylvania-based Lincoln Financial Group has commissioned a survey of consumers
who have the means to prepare for the future — 500 U.S. residents ages 40 to
70, with a household income of $150,000 or more and at least $200,000 in
investable assets, who said they knew something about long-term care — to find
out why that ticking in the corner has blended in with bird song and computer
hard drive hum.
Lincoln also
sent Michael Hamilton, a vice president in its institutional product solutions
unit, and Bill Nash, the national sales manager for its MoneyGuard life-LTC
hybrid product, on the road to get some attention for the alarming new
findings in the survey results.
Vast planning holes
When Lincoln
commissioned its survey, analysts designed the survey processed so that all of
the prospects would be people of obvious interest to financial professionals.
All
participants had the means to buy personal protection insurance, and 78 percent
had life insurance. About 35 percent had annuities.
Only 28 percent
said they had long-term care insurance.
Just 45 percent
of the participants who had a financial advisor said they had talked about
long-term care planning with the financial advisor.
And 53 percent
of the participants who had discussed long-term care planning with a personal
financial advisor had talked about the topic on "several
occasions."
Narrow discussions
Many sellers of
traditional stand-alone long-term care insurance have long thought of
traditional long-term care insurance as the best, most affordable
vehicle for protecting consumers against catastrophic long-term care risk.
They have been skeptical of any arrangement that might reduce the amount of
protection a consumer gets against that kind of family-crushing risk.
Issuers of the
life-LTC and annuity-LTC hybrid products focused mainly on single-pay products
aimed more at affluent families addressing asset-planning concerns than at
protecting ordinary people against catastrophic piles of nursing home bills.
Today, issuers
of stand-alone long-term care insurance are starting to see that the challenges
in the stand-alone long-term care insurance market mean that families may have
to look at a wider array of planning tools.
The issuers of
the hybrids have introduced multi-pay products that let ordinary families get
in.
But Lincoln
found that only 19 percent of the survey participants who said they had talked
about long-term care planning with a financial advisor had talked about life insurance
with a chronic illness rider. Only 17 percent had talked with an advisor about
annuity-LTC hybrids, and just 13 percent had discussed life-LTC hybrids.
One lingering
barrier may simply be that some of the advisors who do have an interest in
long-term care planning lack the professional certifications they need to talk
about other options, Lincoln executives said.
Failures to act
Another
challenge is that some consumers who could protect themselves against long-term
care risk, and know they should, simply haven't.
An advisor told
those consumers about the need for them to do something, but did not close the
sale.
Bill Nash, the
MoneyGuard sales manager, said he thinks one way for a financial professional
to close the sale, on doing something about the long-term care time bomb, is to
get a consumer to envision what might happen if the he or she has not prepared
for long-term care expenses and suddenly faces such expenses, or the need to
act as a full-time caregiver without adequate support.
He recommends
finding out finding out what clients enjoy doing and asking, "What if you
couldn't do that? Is that a concern for you? Is that something you'd like to
protect against?"
Nash said that,
for himself, one driver is wanting to protect the time he has available to
watch his children play sports.
Other people
who may need care, and who may end up acting as caregivers, will have their own
unique drivers, Nash said.
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