Resistance to Long-term Planning a Looming Crisis
- Thread starter Arthur Rudnick
- Start date
- 657
I find it interesting that 17% of the $100,000 and above income demographic has LTCI. I figured it was lower.
I wonder what percentage of this group are uninsurable????
Also, I don't think the problem is "lack of access to information" about LTCI.
I think it is "lack of interest in information" about LTCI.
Look at the per cent of responses from advertising, direct mail, etc for LTCI. Very few are interested in getting info.
I wonder what percentage of this group are uninsurable????
Also, I don't think the problem is "lack of access to information" about LTCI.
I think it is "lack of interest in information" about LTCI.
Look at the per cent of responses from advertising, direct mail, etc for LTCI. Very few are interested in getting info.
The average person on the street does not even know what long term care insurance is. Period. It's only when something happens to a family member and they don't have it that they discover it exists or some agent somehow finds them and calls them out of the blue.
Think of the average person. That average person could be making over $100,000 but that is not a lot of money when you think about it depending on where you live. If you are in NY, DC area, California, that money is gone in no time. You are paying for your health insurance, car insurance, homeowners insurance, and maybe even life insurance. That's a lot of money going out of your pocket for just one thing, insurance. You have not discussed paying the notes for those items. The average person is overwhelmed with just paying for living. Living in the US comes at an expensive cost.
The average person will avoid long term care insurance because it just another expense and since it's too far for them to see right now it's not a necessity. A big part of America's problem is that many Americans don't plan for anything. People are in the here and the now. That's why you read so much about Americans not being ready for retirement and having little to no savings. These are not only people who are poor or have lower paying jobs. These are also people who have significant incomes. Even our American companies do spend enough money on research and long term planning.
So if you can't understand why so few Americans have LTCi, look no further than our culture.
Think of the average person. That average person could be making over $100,000 but that is not a lot of money when you think about it depending on where you live. If you are in NY, DC area, California, that money is gone in no time. You are paying for your health insurance, car insurance, homeowners insurance, and maybe even life insurance. That's a lot of money going out of your pocket for just one thing, insurance. You have not discussed paying the notes for those items. The average person is overwhelmed with just paying for living. Living in the US comes at an expensive cost.
The average person will avoid long term care insurance because it just another expense and since it's too far for them to see right now it's not a necessity. A big part of America's problem is that many Americans don't plan for anything. People are in the here and the now. That's why you read so much about Americans not being ready for retirement and having little to no savings. These are not only people who are poor or have lower paying jobs. These are also people who have significant incomes. Even our American companies do spend enough money on research and long term planning.
So if you can't understand why so few Americans have LTCi, look no further than our culture.
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Arthur Rudnick
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- 1,652
previously posted by csalter
You're saying all of the right things, but you're not putting them together.
LTCi is not right for everyone. If I had to guess, about 70% of my business has been done with those in their 50s & 60s who have seen what a LTC event has done to their parents.
Either the product is affordable for someone or it's not.
If it's not, then agents move on to someone who has the money.
For someone who spent a great deal of time doing your due dilligence before purchasing your policy, why do you have such a negative view?
I hope you never have to use the benefits of your policy, but if you do, you'll understand the vaue of the product.
It's all about protecting assets & income if care were ever needed. Simply put, if someone does not have much of either, they are not a candidate for LTCi.
This product is not for the "average person on the street". Neither is a Merceds, a Lexus or a $1,000,000 home.
You're saying all of the right things, but you're not putting them together.
LTCi is not right for everyone. If I had to guess, about 70% of my business has been done with those in their 50s & 60s who have seen what a LTC event has done to their parents.
Either the product is affordable for someone or it's not.
If it's not, then agents move on to someone who has the money.
For someone who spent a great deal of time doing your due dilligence before purchasing your policy, why do you have such a negative view?
I hope you never have to use the benefits of your policy, but if you do, you'll understand the vaue of the product.
It's all about protecting assets & income if care were ever needed. Simply put, if someone does not have much of either, they are not a candidate for LTCi.
This product is not for the "average person on the street". Neither is a Merceds, a Lexus or a $1,000,000 home.
- 10,357
Neither is a $500k home! But people finance them anyway because they want them and see the value in them.
People dont want LTCI or see the value in it until the value slaps them in the face.
Arthur, I don't have a negative view on LTCi. What I do have a negative view about is the fact that there are those whom such a a policy could benefit, don't take advantage of it. I read the bogleheads forum and they slam LTCi. I realize that it's not for everyone, but it seems that it is truly for a limited group of people. You can either pay the bill yourself or you look to the government to pick up the tab!
I saw it as a benefit for me. I have several colleagues for whom it would be a benefit for as well, but they push it off to the future or just don't really consider it necessary. I know their financial circumstances and its potential impact on their families but they don't really want to take the time to do the work to find out more. That is why I say we are lazy Americans.
I saw it as a benefit for me. I have several colleagues for whom it would be a benefit for as well, but they push it off to the future or just don't really consider it necessary. I know their financial circumstances and its potential impact on their families but they don't really want to take the time to do the work to find out more. That is why I say we are lazy Americans.
- 10,357
One problem in the LTCI arena (imo) is the way both agents and the public view the way we insure for LTC.
We have an "all or none" mentality. If we cant afford the maximum amount we might need, we dont want it. So people look at a $500k or $600k benefit amount and say "I cant afford what I need so oh well".
But something is better than nothing. People underinsure for life insurance and disability insurance all the time. If they cant afford the max they might need they at least get what they can afford.
But both agents and the public seem to take the opposite approach with LTCI. To have 3 years covered is better than 0 years, etc etc.
jmo
We have an "all or none" mentality. If we cant afford the maximum amount we might need, we dont want it. So people look at a $500k or $600k benefit amount and say "I cant afford what I need so oh well".
But something is better than nothing. People underinsure for life insurance and disability insurance all the time. If they cant afford the max they might need they at least get what they can afford.
But both agents and the public seem to take the opposite approach with LTCI. To have 3 years covered is better than 0 years, etc etc.
jmo
- 657
scagnt83,
I have been a LTCI agent for 13 years. I have ALWAYS been a proponent of "something is better than nothing". So don't group all us agents in one group.
I can't imagine someone having a small benefit LTCI policy saying, at the time of claim, that they would be just as well to have no coverage at all. That's not even logical.
Of course there are agents that think this "something is better than nothing" mentality is nonsense.
I simply do not agree with them.
I believe that if I walk away from a prospect because they won't or can't buy the big loaded up policy, I have done them a tremendous disservice.
I have been a LTCI agent for 13 years. I have ALWAYS been a proponent of "something is better than nothing". So don't group all us agents in one group.
I can't imagine someone having a small benefit LTCI policy saying, at the time of claim, that they would be just as well to have no coverage at all. That's not even logical.
Of course there are agents that think this "something is better than nothing" mentality is nonsense.
I simply do not agree with them.
I believe that if I walk away from a prospect because they won't or can't buy the big loaded up policy, I have done them a tremendous disservice.
- 10,357
I agree. And I know that not all agents are like this.
And I think most agents will try to sell something as a last ditch effort. But my point goes more towards the initial presentation.
I found out a long time ago that it is best to sell up, not down.
When you show a prospect a $600k benefit pool at $350/m. They can get sticker shock real quick. And that sticker shock can put them in a mindset that is not conducive to them thinking about the benefits of the policy. After seeing the price, all they will think about while you talk is how expensive it is.
Instead show a middle of the road policy. Explain how much the cost of care is in your area and show how much it covers.
Then give them the choice to buy up. Or if needed, down.
My point is that I have seen/heard about many agents killing a sale by showing an unafordable "Cadillac" policy to start, and the client immediately zones out b/c of the high premium.
Its like way back when I served tables at a real fancy steakhouse.
-you tell them the filet is great
-they say ok
-then you ask if they want the normal filet or the "bone-in filet" and you go into detail about the bone in filet
-they say ok to the bone-in filet.
-then you ask if they want to add a lobster tail to go with the bone-in filet.
All of a sudden a $30 entree is turned into a $90 entree. And the best thing is that they are excited about it because they are caught up in what it is/does, not the price.
But you start off with the $30 entree, not the $90 one.
So as agents. We need to focus on what it does first. Then price.
And we need to do a better job showing the public that LTCI CAN be affordable.
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- 183
Great points from both of you, bilberry and scagnt83.
As an agent myself, I have to agree unfortunately, that this is a different sale than your typical "something beats nothing" pitch of life insurance or FE or even accident/CI in place of a traditional health policy.
With LTC, if you cannot afford the proper amount if coverage, and you encounter an event that requires coverage, you'll burn through savings and assets, etc., until you arrive at Medicaid.
If you cannot afford enough coverage to protect from the vaporization of all your savings and assets, you might as well gamble that you dot need it. Either way, if you need LTC, you'll lose everything and rely on the state to care for you.
Very unusual product and sell. I believe in the product completely (despite my statement above), yet it can be a valueless purchase. Not IS, but CAN be.
As an agent myself, I have to agree unfortunately, that this is a different sale than your typical "something beats nothing" pitch of life insurance or FE or even accident/CI in place of a traditional health policy.
With LTC, if you cannot afford the proper amount if coverage, and you encounter an event that requires coverage, you'll burn through savings and assets, etc., until you arrive at Medicaid.
If you cannot afford enough coverage to protect from the vaporization of all your savings and assets, you might as well gamble that you dot need it. Either way, if you need LTC, you'll lose everything and rely on the state to care for you.
Very unusual product and sell. I believe in the product completely (despite my statement above), yet it can be a valueless purchase. Not IS, but CAN be.
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