If you have ever ridden a roller coaster, then you have a pretty good idea of what the long-term care market has gone through over the last few years.
Carriers have gotten out of the market.
Costs have gone up.
And let’s not even get started with rate increases.
Now that I think about it, maybe a roller coaster isn’t the best analogy. Instead, anyone up for a little whitewater rafting?
Be prepared for some scary moments and the chance of experiencing a face full of water when it’s least expected. Or worse, there’s that one person who falls out of the boat. (Although, with all the safety precautions taken, hopefully that scenario is less likely.)
And throughout the whole ride, the river guide is giving advice to help you make it through the rough patches, with the promise that all will be smooth in the end.
There’s some anxiety when going through the rapids, and you might even have second thoughts whether you should have even come along for the ride. Despite that, one thing remains certain: You NEVER, NEVER, NEVER, just jump out of the boat. You stick with it, ride the ups and downs, and know that there will be a change to the flow coming up soon.
It’s the same with LTC planning. We all know that pricing has changed. Carriers made assumptions that were incorrect and mispriced blocks of business. Not only that, they gave the farm away with 5% compounding inflation and lifetime benefits. How can a carrier ever be profitable when trying to manage an unknown risk? But, what happened, happened.
We can’t hide from the mistakes of the past. Instead, we need to keep our eyes forward and focused on the end goal. We need to adapt to the changing market, not jump ship. We can’t try to sell policies the way that we used to. We need to be better, plain and simple. But how do we do that? What can we do to keep us in the raft?
Let’s start by changing our recommendations to our clients. Most often, we lead with the Cadillac plan. Buy the most coverage they can get because the cost of care is through the roof and continuing to rise. But how has that approached worked out?
Here’s what typically happens: The client says, “Wow, that is too expensive, and I could never afford that!” They walk away not doing anything. As advisors, have we done anything meaningful for our clients in that situation? No. We just wasted their time — and our time as well.
Don’t just check the box on a conversation.
Use the resources available.
Nobody wants to go to a nursing home and they are likely to do whatever they can to stay out of one.
So, that leads us to look at the way that we are designing cases. It’s time to change our mindset. Some coverage IS better than no coverage. Yes, if we show a smaller policy we probably won’t cover 100% of the cost of the care. But have you ever had a client send a check back because it wasn’t enough? I haven’t.
There is no silver bullet when it comes to developing a plan for LTC, but there are a lot of different options out there. Being better means being open to different planning scenarios. Remember – the product is just the funding option for the overall plan.
So the next time you are having a long-term care planning discussion, don’t jump out of the boat. Be persistent, relax and know that your guide will help you get through the rapids to the calmer waters that await you.
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Chad Eyrich is proud to help keep families together with long-term care planning. He helps advisors and their clients avoid the potential financial devastation of an LTC event by providing strategies around traditional, asset-based and linked-benefit insurance. In addition to earning his Long-Term Care Professional (LTCP) and Certified in Long-Term Care (CLTC) designations, Chad has a life and health insurance license, and a property and casualty insurance license.
© 2018 Ash Brokerage LLC.